Is this the Bottom?
We have always said that no one will know when the bottom is until it is at least 3 to 6 months after the fact. With the amount of dips and rises that we have seen lately, it can only leave you feeling like you just got off of the worlds best roller coaster. The only thing the average person can do is just hang on and try not to puke. Because just like on a roller coaster, most of the time that puke is going to hit you right in the face.
This week Congress is fighting over extending the tax cuts. Most people agree that a compromise will be reached here very soon. Republicans feel they have the upper hand and Democrats understand that if they don’t reach a deal, then they will be wearing the blame for a long time. This kind of situation forces the elected to get down to business and get the job done for the American people. This is what we need even though any compromise won’t be perfect and it won’t appease everyone. Its just too bad that things have to get so bad before they put their own ambitions aside and remember who they are working for.
Well, this week could be the turning point for our economy. It is understood that adding almost $900 Billion more to the deficit is continuing to dig the grave, but the confidence that this should bring to the American people should be priceless. I personally feel that the two year extension is only adding another bandage without addressing the real problem, but it will help. If Congress really wanted to make a difference, then they would attach strings to the tax breaks. For example, giving tax breaks to higher income business who create jobs would be an incentive’ instead of breaking taxes for everyone without any performance. The problem with the TARP program back in 2008 was that they just bailed the banks out without any strings. They did not keep them accountable. And they continue to make the same mistakes.
I do see this tax compromise a very possible turning point to our economy. Businesses have done well the last year. There is an estimated $2 Trillion ready to be invested in jobs, company growth, etc. The item that we need to bring it all together is going to be CONFIDENCE. Once that is established, then look to see our economy recover in a stable way. It will be slow to begin with, but it will start recovering. The only problem is that people need to plan for the future of higher taxes in every category. The rich are not the only ones that are going to bail us out. Everyone will be effected. The damage has already been done.
The housing market will recover slowly after the economy recovers. Job growth is still our largest adversary to the housing market. The estimated amount of foreclosures in the next two years, as we have pointed out numerous times, needs to be hedged by job growth. People need to make enough money to keep their homes as well as their spending habits. This era of confidence just may be the start of this recovery.
Why not sell members of Congress to pay for our debt?
So here we are, the United States is almost $14 Trillion in debt. Does anyone really have a grasp what that means? I think most people don’t really care. Think about it. We continue to borrow money from other countries and does our quality of life change because of it? Do we really end up paying that money back? We just continue to dig our hole deeper and deeper, spending and spending. Sooner or later the note will be called. Look at California. They are now in a State of Emergency. Who will bail them out? The answer is in the mirror unless we find another way.
This recession, and in my opinion its really not over despite what the GDP shows, has caused many people to look at their own personal debt. Many folks have cut their spending and destroyed their credit cards so they don’t continue to dig their graves. They realize that they can not sustain their lifestyle without having a way to pay for it. So many people have cut back. But not our government. It has grown substantially over the years, but it has moved into maximum overdrive the last 2. We have increased our government so much to protect us, but we can’t pay for it. Now congress is fighting over taxes and ideas in how to pay for it. After all, we are the ones to pay for their work, not them. Well, unless we want to be owned by China. Oops! Too late. I am reminded of Proverbs 22:7 which says that we are slaves to our lenders. Why would anyone want to be a slave? I guess you would have to believe in God’s word in order for this passage to resonate with you, but I think most people agree that if they are in debt, then they really don’t have the full freedom that they could have.
Re-enter in the United States. We are almost $14 Trillion in debt, mostly to China who can’t stand us. Doesn’t that seem fitting? The CBO predicts that in 2015 we will be $17 Trillion in debt. How will we ever pay it off? Well, I do have an idea…
There needs to be some kind of creative way to get us out of slavery. Why not sell every member of congress who has contributed to our debt that has not been paid off? I understand that the majority of the voters vote them in, but we really can’t control what these people do once they are in. This administration has bet on speculation of tax revenue for the spending that they have endured the last couple years. Now they are arguing over those tax codes. The lawmakers who have spent all of the money argue that the higher earning individuals should pay more. Why should the so called “rich” have to pay for it? The Administrations and Members of congress are the ones who spent the money. Why don’t they pay for it? So back to my argument. Unless these spenders can pay for the mess they put us in, selling the ones off who increased our spending could be a viable option. I could see someone from Dubai or China paying a really good price for Chris Dodd or even a higher price for Barney Frank. They could really have a good time with him! I understand that we wouldn’t get much of a return for Charlie Rangel, but anything would help.
This idea may seem a little crazy, and of course the ACLU would have issues with it, but I think it could work. All I am saying is that it should be looked into. It may require these spenders to think twice before they give away our hard earned money.