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The Economy Is Going To Hell In A Handbasket. What Can YOU DO?

Read more articles on Finance and Politics and Investing.

February 9, 2008

Posted by neillevine

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

         

Last year, from the endless depths of its accumulated wisdom and financial acumen, the Federal Reserve was sending interest rates higher.  This made borrowing money ever more costly, making it more expensive to buy a car or own a house.  This slowed sales and experienced investors in the financial markets began to notice that the economy just wasn’t quite right.  This caused the economic news to sour.  Investors began to worry resulting in the stock market beginning to fall.

As equities lost value, grousing began to pick up in the financial community.  In response to this complicated and expensive financial dilemma, the Federal Reserve stopped raising the cost of borrowing money and even began to make it cheaper.  The markets fell a little more.  So the Federal Reserve took a big cut out of high interest rates, but the financial markets, particularly the stock market continued to dawdle, apparently exhibiting a lack of faith in whatever was or was not being done, as the case might be since making consumers happy made the stock market hum and consumers were not buying because prosperity, sure as shooting, was becoming unaffordable.  If consumers cannot afford big ticket items, there is no sale and nobody makes money.

So President Bush stepped up and told the Congress the country needed economic stimulus.  Why shouldn’t people be allowed to make and spend money.  And after  debating in their own inimitable manner for an extra day or two about a couple of billion dollars in extra benefits, the Congress appears to have passed a bill to help ordinary citizens buy whatever they can purchase for six hundred dollars.  Leading to claims that the government has pumped up the economy.

Unfortunately, there still seem to be serious doubts about what is going on and the money is not going to arrive right away since sending rebate checks takes time so the financial markets are not acting as if prosperity is right around the corner.  Rather they are behaving like they want to lose their shirts.

This is not good.  It costs money to lose your shirt in the stock market leaving a lot of investors poorer off than they were before interest rates began to rise.

Congress has not offered an explanation for all this economic turmoil.  But it is possible to look for a vast right wing conspiracy of a leftist plot to wreak havoc on free enterprise.

Wherever the truth lies, whatever the real cause of these dreadful circumstances and dire consequences remember that it is possible to vote for the financial solution of your choice.  So as John McCain has advocated, “Vote early.  Vote often.”   The alternative is to complain loudly at the first opportunity that presents itself.

Last 5 Entries by neillevine

• Tax Cuts Follow The Bouncing Interest Rates - November 3rd, 2008
• Fund Raising, Jobs, The Future Of The Economy - October 24th, 2008
• Term Limits, Debates, Speaker Pelosi Investing - October 17th, 2008
• Economics=Dismal Science. Budget Deficits Balance Of Trade - October 14th, 2008
• Cam Getting Osama Bin Laden Boost Confidence - October 8th, 2008

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