Posts Tagged ‘Stimulus

16
Feb
09

Bliss in a Ponytail

Has the cliche “ignorance is bliss” caused us as a culture to discount the intelligence of many a bubbly cheerleader?  Not just pom pom-toting-ponytailed high-school cheerleaders, but the ones we meet as adults, too.  The ones who remind us to keep moving forward when we can seem to move our feet on our own.  Personally, I have been very guilty of it.  Anytime I see a ponytail bounce by, trailing a cheerful “hello,” I assume that ponytail is attatched to a sweet but empty head.  I have always held to the conventional wisdom that those who know the most are going to finish first and best.  We need to know what is happening if we are to be protected against it or to benefit from it.  I refuse to fault myself; this makes perfect sense. 

HOWEVER, I have recently found myself nearly unable to cope.  I didn’t even notice how bad it had become (make not mistake, my children had) until I turned off talk radio and chose instead some vapid music to sing with until my throat bled.  It was great.  I had no idea until I was nursing my very sore and scarred throat that I had been unhappy.  Lately the world has become nearly unbearable.  I have steeped myself in statistics.  The size of the stimulus package.  The dollar amounts actually going toward infrastructure.  The dollar amounts that may not result in economic gain.  Previous GDP’s and the stimuli pressed through at those times.  The resultant tax burdens.  Child pornography.  Human trafficking.  Teen drug abuse.  The last time I had an oil change.  The unemployment rate…You get the very large picture.  I determined that I would unplug for a while.  No more talk radio in the car and no more internet research and NO evening news.  No newspapers, except the Target ad on Sunday. 

First, I began my experiment with a certain amount of fear.  I felt so isolated and I felt that I would be ill-equipped to protect myself and my family in the event that – I don’t know – there was a literal fan and the world became covered in, well, you know…Then I had an epiphany.  Thank GOD.  I realized that yes, it is ridiculous to live a life of complete ignorance.  But just as ridiculous is to climb under the covers over what amounts to little more than a lack of control.  I can learn all I want about every issue facing us as Americans, but this does not change the fact that I have no control over these issues.  Right now, I am not part of a majority.  I can write my congressmen and petition all I want, but I am unlikely to change the outcome. 

Now, I would never condone squandering one’s life in complete ignorance Paris Hilton style.  BUT, to determine one’s moral compass and live in such accordance, permits a life of ignorance.  My daughter argued with me the case of Oedipus (not Paris Hilton), making the case that a life of ignorant bliss would surely lead to complete destruction.  Oedipus seemingly had no moral compass.  He was living an ignorant and self-destructive life of incest, addiction, and all the other trappings. 

However, to determine a standard of living and adhere to this would fully allow one to exist in complete ignorant bliss.  For instance, were I to save 20% of my income, avoid debt, and donate 10% to the less fortunate, I would easily avoid increased taxes and now that the economy has turned, I would be unconcerned.  I would have savings to rely on and no debt to worry me.  This isn’t just a financial matter.  To live as outlined above, I would have to avoid envy and covetous behavior.  That is probably the very root of many financial ills. 

If I had lived a life based on a strong moral code, the concerns of our nation would not be mine.  As our situation worsens, I could use my strength to truly combat suffering.  I would not be beholden to debt, or even a job.  Is it possible that keeping my mind centered on the events happening each day in this culture is where true ignorance was born?  It seems that my extensive knowledge of these many problems has done more damage to me and my psyche than complete ignorance would.  Perhaps, had I ignored that which I could not control and instead worked just on myself, I would not be overwhelmed at this moment.  I would then be a worthy adversary. 

Whoever thought that the cheerleaders are the true heroes?

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01
Feb
09

The Stimulus in the Corner

A man I look up to a great deal gave me some advice.  It was the best advice I have ever gotten.  I felt backed into a corner with no way out, so I was complaining and he said, “Why would let someone back you into a corner?  If you live right, you’ll never be in the corner.”  At first, I thought he just didn’t understand that I didn’t have a way out.  Then I realized that I had absolutely gotten myself into the situation and I had no choice but to find a way out, by changing my attitude in a drastic way.  The funny thing is, I don’t even remember the situation I was in.  I just remember this advice and the many choices I have made because of it. 

Our nation is backed into a corner.  Collectively, we were irresponsible and we landed ourselves up against a wall with now way out.  We achieved some financial success, but saw no reason for gratitude.  Instead, we borrowed more to satisfy our every whim.  Then, we failed to hold our leaders to any standard.  In our apathy, we stopped expecting honesty and objectivity from our media.  Now, we have a mess and we need to change our attitude.  Actually, we need to change our entire lives.  Everything needs to be different. 

We’ve been offered a solution in the form of an economic stimulus.  Now the question is whether to take it or leave it.  It is so appealing.  We could accept this solution at little or no cost – right now.  Eight hundred and nineteen billion dollars is so much money.  Properly spent, it could solve all of our problems, to be sure.  What then, would it leave our children with?  The interest alone on this $819,000,000,000.00 is more than we have spent on the war in Afghanistan.  The size of the spending package is equal to the national budget in 1984 and it is two thirds of our current budget, that’s for all government spending.  All of it.  In the ’90’s, a $19 billion dollar stimulus package was on the table and Bill Clinton, not known for fiscal responsibility, said it was too aggressive.  That was less than a quarter of the size of this package just a little over 10 years ago.  This money means $5000.00 for every household in America.  Right now, to fund the bill, every household would have to cough up $5,000.00.  When the nation is paying it back in 20 years, our children will bear the burden of $819 billion plus all that interest.  The tax burdenwill be crushing.  What this means is that this package will create another bubble, tantamount to the housing bubble or the tech bubble, that is destined to burst.  The question is, what will become of the next generation when this colossal bubble bursts?  If we pass this stimulus package, we are keeping ourselves backed into this corner. 

So what if we don’t?  I would love to say that this is a media-induced frenzy, and there is some evidenct to that point.  It is not hard to believe that if the economic situation is dire enough, we will do anything to solve it long before we take the time to truly consider our options.  And let’s be informed.  In the ’80’s, a time that keeps popping up in the media, unemployment hovered around 7 per cent and peaked briefly around 10.  It was believed then that if unemployment sunk below 6 per cent, inflation would run out of control.  Six to seven per cent unemployment was the goal then and that’s exactly where we are now.  We are moving higher, but is that the result of media-induced hysteria?  Everybody I know is employed right now, but nobody will spend.  When spending stops, commerce stops.  When commerce stops, production stops.  When production stops, jobs are lost. 

Also, the housing numbers for December are in.  New mortgages rose by 6.5% in December.  January is proving to be one of the busiest months many in the mortgage industry remember.  Those official numbers will be in within the next few weeks.  Interestingly, this optimistic news did not get a lot of press.  I, for one, am so hungry for positive economic data that I leapt on the news.  I waited for it to be touted near and far, but then, it fell flat.  In fact, to recall the exact figure I had to find the Australian version of the Wall Street Journal. 

Another thing we cannot deny – corporations are still making money.  American business is still profitable.  It may not be as profitable as shareholders and board members would like, but profits are there.  In the ’80’s, a lot of business was not profitable, not at all.  Then, the general population seemed to have enough common sense to understand that some years are better than others.  This was not a profitable business cycle.  This is not where we are right now. 

I have to wonder if our situation merits $819,000,000,000.00?  I really, truly want to believe that it does not.  But I don’t want to be wrong.

So every time I am confident that the media has hyped us to the edge of sanity, I remember the reason we are here.  Hedge funds.  A credit market gone wild.  In the last decade, the United States has lost ground as a producing country.  We offer services, intellectual property, and money.  Even in the beginning, when I was young and clueless, I looked at our credit markets and wondered where the money was coming from.  How, I wondered, did Household credit have enough reserves all of a sudden to loan billions of dollars to high risk customers?  It seemed that every company was doing this and I knew a very small bit about reserves and risk factors and it simply didn’t make sense.  I was 27 when I noticed this, and I was certainly no economist.  SO, how did Alan Greenspan miss it?  How did the OCC miss it?  How did we end up here where are lending institutions have a trillion dollar shortfall in reserves?  That is the crux of the problem, one trillion dollars, or one and a half, but whose counting?  When I remember that huge number, I have to wonder, do we need $819,000,000,000.00?  Possibly.  Should we take it?  Will it make a difference?  Will it make it worse?

It will make it worse.  It may save us now, in the short term, but we should be very concerned about what we are leaving to our children.  If we could find it within ourselves to change our way of life and to change our attitudes, we could keep our children out of the corner.




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