Tuesday, November 25, 2008

Its kind of funny


Not long ago all you heard about was how American were spending like drunken sailors, living off thier credit cards and home equity loans. The mantra was, back then, spend less and save more. Americans were too far in debt and sinking further everyday.

Now the government has just made $200 billion available to banks to try to increase the availability of credit for American consumers for credit cards, auto loans and the like. Isn't that part of what got us in this mess???Now the government has just made $200 billion available to banks to try to increase the availability of credit for American consumers for credit cards, auto loans and the like. Isn't that part of what got us in this mess???

The housing bubble has now burst and the government is doing all it can to re inflate that bubble. It was called a bubble for a reason. That reason is that the increase in housing prices had no real foundation. In other words, housing prices should not have been raising that fast. The government is now trying to stabilize and or reverse the declining housing prices. It wasn't long ago that people were complaining that no one could afford a house anymore. Not that it stopped anyone from loaning money for them to buy houses. That fact has now caught up with America.

So now the government thinks the solution is to pour more money into what is, essentially, a black hole. So far the spending is totaling about 2.5 to 3 trillion dollars between all of the bail outs/rescue plans proposed. One thing you can count on is if the government says it wants to spend 2.5 trillion, it will likely spend 5 trillion. That does not even include the additional spending that Obama promised and is still proposing such as health care, tax cuts, green initiatives, education.

The government has no idea how to get us out of this mess. The only way out of it is to take the pain. You can have a lot of pain for a little while, or a little pain for a long while, but you will have the pain no matter how much the government spends.

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