The Stimulus Illustrated

[Pilgrim]

Here's some more cut and paste shinola from the CBO. With all the talk about a few billion here and a trillion or two there, it's easy to lose the perspective of how much Obama and the Democrat led congress is actually going to spend in 2009 compared to deficits from prior years. You can also see how easily it should be for Obama to "cut the deficit in half" and where that would leave us. Pictures are sometimes easier to understand than words.

Of course the assumption is that the projected deficit rebounds back to normal levels in 2010 and beyond (assuming we don't get "stimulated" any more), but the money spent this year will still have to be paid back by our children and grandchildren. This "stimulus" makes about as much sense as buying a brand new fully equipped expeditor straight truck on your son's or daughter's credit card, just because you think it's a really good deal right now. Granted, business is slow but you promise them you will still be able to make the minimum monthly payments (which may or may not cover the finance charges) since this new Rolls-Royce type truck will allow you more White Glove type revenue. When the truck wears out and/or you retire, everything's cool - you just tell your kids the payments are theirs from that point forward since you and grandma are moving to the retirement village in Florida.

 

[greg334]

Well Pilgrim is it a bit more depressing than that.

People think we can tax our way out of this, but we won't be able to. We are multiplying the national debt by 3 or 4 times and it won't be a debt on our grandchildren but generations after.

People in general are too stupid to get what is really going on and a lot of them think that deficit spending is the way that government works. They also think that the president is the most important person in our country.

But I digress.

The real problems have to do with emotion, to start with emotion of the markets and businesses. This president is the first who speaks negative about the economy and the country. His wife (for some reason is now an official for the country and now planning on shaping policy and legislation) showed a lot of us what this guy is made of when she said she was finally proud of her country.

The stock market is showing us what is going on, the drop in the dow is not because of the credit market being tight but rather the rhetoric about taxes, about years to recover and so on.

Businesses are hording money and not sdpending because they are scared.

On the other side of the emotional issue is the crying of people who are losing money in their 401k and the reduction of their home values. The real problem with these two things are connected, the people are impatient and greedy.

My sister-in-law is really upset with the lost $600,000 in her 401k in the past few months all because her money was in stocks. The first lesson of investing for retirement is you select safe risks, the stock market is not a safe risk by any means - it is like gambling.

The housing issue is not a problem if you were smart, taking a traditional mortgage and not getting into a home to flip it a few years later. My house lost 48% of its value and I am not worried about it. The reason is that for many years housing sometimes went down. In the 20's housing prices dropped due to the massive foreclosures of homes where people over extended themselves. Now we have a program where you can 'remortgage' your home to the value that it has dropped to. This means more national debt to bailout 4% of the 70% of the population who owns homes.

 

[MentalGiant]

I won't pretend I know what the problem is or what caused the problem. But, if I had to say what caused most of it, some people are more greedy than others.

I'm not one to be real big in politics, because I could make suggestions or talk about it all day and not make a big impact on any of it. Of course, if I had some big politician and some money to stuff their pockets to make them think my way, I could have some influence on them. But, that is not the case.

All I can do is listen to what others are saying, do what works for them and go from there and hope everything works out. Don't get me wrong, I'm the first to blurt out what I'm thinking and not scared to say so, but in the world of politics I have no hopes of making America any better.

VOTE FOR ME!!!