The economic firestorm that we are in the midst of is yet to be contained, or for that matter, completely understood.Some things are very clear like the fact we spent more than we earned, as individuals and as a nation, for decades on end. That we know for sure, and regardless of who we blame the most for this situation there is no bigger economic mistake one can make.
This is something that I harp on often, and I expect I will keep on doing so because I do not have any reason to believe things will change; see: Ignore Washington -- keep saving; General Patton makes a point.
The dilemma of over spending seems to be an inherent problem in any form of government. It simply seems to be a requirement of holding office or getting elected to promise more, not less. This would be true in more authoritarian governments as well as the easiest way to "keep the peasants from revolting" .
Last week I introduced the concept of fire breaks in Does General Electric have an adequate fire break? as it may also apply to what I have referred to as an ECONOMIC FIRESTORM.
I think President Bush did not do enough to help the economy and for a Republican administration to ignore budget deficits and outspend his Democratic predecessor was outrageous. Now President Obama has decided to spend, spend, spend! THIS IS A BAD IDEA!!!
There are many parts of the recent spending bills I would agree with when it comes to stabilizing the economy. However, all of the the expenditures for health care, and other economic burdens are unwise. If our nation thinks that we need to reform the health care system, I am all for it. If our administration wants to spend first and find the money later, I'm totally against it.
I have been wondering lately whether it costs the average American more money in losses to thievery or whether we lose much more to stupidity and ineptitude. Then there is the matter of Congress that may be active on both fronts.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of GE and have open options as well.
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Reader Comments (Page 1 of 1)
3-09-2009 @ 6:42PM
EA said...
By the people, for the people.
This email is extremely important to read and forward.
As we all know trillions of federal dollars are being doled out by the administration, Congress and the Federal Reserve. The money includes Obama's $3.6 trillion dollar budget and the $837 billion dollar stimulus package he signed last month.
What’s our new administration actually doing for us directly? Billions of dollars is being designated for the stimulus package bailouts. I haven’t seen a dime, have you?
Here is my plan for a stimulus package and hopefully your plan also. This is a stimulus package with a bailout directly to the citizens of the United States of America..........
There are approximately 304 million US citizens in our country. Obama’s stimulus package is for a hefty $837 billion dollars. If you break it down, that comes to approximately $2.75 million dollars per person. Wow wouldn’t that be nice. Ok, let’s be a little more realistic, we are going to save the country billions of dollars and boost the economy at the same time with this plan. How does $300 thousand dollars sound as an example for each US citizen? That’s a cost of approximately $91 million dollars from the Federal Reserve. That’s it, $91 MILLION DOLLARS, not $837 BILLION DOLLARS. Don’t get too excited, the $300 thousand dollars would be issued on a credit card and it will have to be spent within a year. We wouldn’t want anyone to quit their job, if they even have one. That’s the reason for spending your $300 thousand dollars within a year.
Wow, what would this do to the economy? Are we having a housing market problem? Not any more, I will be bailing out the banks by buying that foreclosure or paying off my home. Next, I would have to bailout Ford Motor Company or General Motors by purchasing a new truck or car. I’m going to bailout my creditors also, by paying off my credit cards. I still have plenty left, I think I should call the roofer and have a new roof put on the house, have the house painted, new carpets, fix the leaky faucets, and a new kitchen. Ok, most of my money went back into the economy. The painter, carpenter, roofer, electrician, plumber and realtor all have their jobs. Thanks to the $91 million dollar stimulus plan and my $300 thousand dollars, our economy is thriving.
What’s going to happen when the millions of US citizen exhaust their Unemployment Benefits after the 52 weeks maximum? What’s going to happen when our credits cards are at there maximum? How are we going to pay our mortgages with no jobs and no unemployment benefits? We need the money now, not in a year or two. My stimulus package will work for us, the citizen of the United States. President Obama’s stimulus package will not help the citizens in need now. Obama’s stimulus will make fools of us, as the recipients drive in their Rolls Royce and fly to their luxury vacations in their private jets.
Why does Obama insist on bailing out companies that actually caused this economic failure? Obama had a plan before he even became president to make a lot of people wealthy, and we are not on his list.
Your Financial Advisor
3-09-2009 @ 7:19PM
Sheldon L said...
EA,
You must not have understood the stupidity part of the story.
$837 billion divided by $304 million is $2,753 per person so you are only off by a factor of 1000 times!!!
This nonsense has been floating around the web for a while now and foolish people keep forwarding it.
I wonder if he has responded to the Nigerian Monarchs and Treasury officials that have been sending him emails?
3-09-2009 @ 8:39PM
william lindblad said...
Welcome to the general commentary boards and I don't have to say more.
To the blog - I would go with George, Washington that is. Patton had many good points, but, do some serious research. My father served under him and liked him and even with a court martial reprieve, had reservations. The old man was no dope. He predicted the fall of the Russian communist regime in 1957. Never gave a time frame, but when it happened, he was right on the money to circumstance.
Back to the blog -
Please think back a bit. I did not vote for Obama. It does not make a hill of difference who is in the White House as any tenant would be in the same position and that is between a rock and a hard place. We are both aware that there exists a myriad of problems, from financial to ecological and just about everything in between and - it is the compounding that makes everything look difficult. The reality is simple - it is difficult. I wish the current administration all the luck in world and I sincerely hope that accomplish a reasonable resolve, however I think that they are trying to take on too much and this will dilute efforts with less than desired results.
I did not do Nostradamus as I don't think(or believe) that 12/21/12 is anything more than a date. At worst, your toilet won't flush and the cell phone won't work
I am getting more to Cervantes. Don Q. was into the ideal. Sancho was into the practical. I am going with the latter.