Thoughts on How to Fix Our EconomyI

I've thought a lot about our new President recently. You've gotta give it to the guy. He assumed his office in the middle of the worst economic crisis in a long, long time. He has taken immediate action to attempt an economic rescue of unprecedented magnitude. He's got vision. He isn't afraid of work. You have got to give it to him for that. But, with all the billions and billions being spent, I can't help but wonder if it's going to the right places. I wonder how much of a difference it will actually make.

The first bailout plan mounted a whopping $700 Billion. Soon after the plan was released I heard critics from all over the place trying to help people understand exactly how much $700 Billion actually is. For most of us that amount of money is far beyond our comprehension. Then Obama added another $787 Billion. What in the world does our government plan on doing with an extra $1.487 Trillion?!? Let's do some math.

According to a count by the Census Bureau in July of 2008, there are an estimated 303,824,640 People in the United States. Simple math tells us the combined debt the US Government just gave every single American, including men, women, children, mounts to $4,894.27. Think about that for a second. If McDonalds apple pies are two for a dollar, that's 9,788 apple pies for every single American. It's more than $247 for every person in the entire world. I can't fathom what our government could possibly be doing with that kind of money.

Wherever it is going, it's obvious there are very few programs in the bill aimed at directly helping to cure the problem at hand. Where did it start? The cure to the problem must circle back to where it started. Sub-prime mortgages. Bad lending practices. Banks lending money they should have never give out. Now that the banks are in trouble, because of their own decisions, they punish everyone else. They reduce the amount of credit granted to upstanding and dependable businesses and individuals. Credit has become and integral part of our society. Many businesses and people can't function without it.

So banks reduce their lending. They reduce existing credit lines. They deny applications today that would have been approved six months ago. Why? Because they are strapped for cash. Why don't they have cash? Because they approved loans years ago they shouldn't have. They made decisions to give people money who claimed to be able to pay it back on word alone. As a business, this is what they do. They get deposits from bank accounts. They take that money and lend it out. That's what a bank does. They make money on our deposits. The problems started when they made bad choices with the money you and I deposited into their vaults. Now they are punishing everyone for their decisions.

I don't know about you, but I would rather have almost $5,000 more in my pocket than letting the government all but socialize another company. It's a joke to think AIG will ever re-pay the US Government all the money they have been given. To date, they have been give $180 Billion "capital infusion." In 2006, a great year for banking, AIG posted a record $14 Billion Net Income. At this rate, it would take AIG almost 13 years to repay the government. Granted a lot of the cash has been given in exchange for ownership and shares, but you get the picture.

In the end, I'd rather have the cash in hand. What about you?