Wake up America!


Filed Under General on Sep 29 

I realize no one wants to pick up a $700 billion dollar bill, but have you considered what can and will happen if we don’t do something to get this economy moving?

Right now, as you read this, our entire financial system is in gridlock.  There is no confidence in the market place and banks are not lending to each other.  These loans are a vital piece of our economy.  Few businesses have enough cash to operate entirely on cash flow and require loans to grow their operations.

So what does this mean?  It means that many businesses, particularly small businesses will become stagnant in growth or may not be able to continue functioning at all.  Unless you have great credit, which few Americans do, you will not be able to get a loan for a house, a car, or any unexpected life events.

The trickledown effect is that many small businesses will go under, leaving 160 million jobs at risk.  You think housing prices are low now?  Wait until no one can get a loan to buy one.  The auto industry is already in trouble.  People will not be able to get loans to buy cars.  Banks will continue to collapse.  How many have we seen over the past two weeks?  Washington Mutual went under this weekend and Wachovia was sold off this morning.  Here we have three major industries that will be immediately impacted and, with the sharp decline in these industries, many people will lose their jobs.  That won’t be the end of it.  Eventually, every industry will be impacted and many more people will lose their jobs.

We are in the midst of a financial crisis and, if not handled properly, this could be the worst financial meltdown that our country has ever seen.  I don’t mean to cause you to be fearful, but you need to understand the gravity of this situation.  $700 billion sounds like a lot, but when compared to the hundreds of trillions of dollars moving through the market, it’s a drop in the bucket.  The purpose of this bill is to allow banks to feel some security and start loaning money again.

Look in the mirror and be honest with yourself.  How much debt do you have right now?  I’m not just talking about loans.  What about your credit cards?  If something happens to your job or you have a change in circumstance, will you be able to pay your bills?

Politicians are getting an overwhelming number of calls and emails telling them to vote against this bill.  I’ve heard Americans are against this 99 to 1.  How many of us are educated enough in economics to understand the full scope of this issue and advise Washington on how to handle it?  Very few.

I know what you’re thinking.  Why should the government spend my money to bail out those greedy guys on Wall Street?  Wall Street only played a part in this.  This started with the individual consumers that bought houses they can’t afford, followed by the banks that gave those people loans, then on to Wall Street who traded the bad debt, and to Washington that, not only failed to regulate, but pressured banks to offer sub-prime loans.  This is not a Wall Street bail out.  This is a bail out of not only our economy but the entire global economy.  If you watched the market today, you saw that it close down 778 points.  That was over a trillion dollar loss today alone.  If you invest in the market, whether you have your own investment account or a 401k, look at your account balance.  How much did you lose today?  If the market doesn’t turn around, you can count on losing much more.  The Asian markets are just now opening and the European markets will open within hours.  Expect to see those plummet.  Several European banks were nationalized this morning.  Expect to see more.

No Economist knows if this is the right approach, but what they can all agree on is that our economy, and the global economy, needs liquidity immediately and will tank if the banks don’t start lending money again and soon.

To all politicians: Get over your partisan politics, quit trying to take credit and place blame.  Do what’s best for the people of this great country!

To all Americans: Picking up this bill is much better than the alternative.  Start calling your Senator and Representative to urge them to pass this bill now.