A very simple economic plan
by dem4life, Fri Oct 10, 2008 at 09:35:18 AM EDT
A very simple plan:
Note: I am not an economist or T.V. pundit, etc. This is my take in my own layman's terms of what the basic problem is and how history has shown how to fix it.
Somehow, through all the bloviating politicians, T.V. pundits, etc, we have forgotten who is really behind the "markets". It's us, the consumer. 2/3 of the American market is driven by consumer spending.
It's pretty simple psychology. I feel good, I buy stuff. I feel bad, I don't. As such, injecting 700 billion into the ether for liquidity, capital or any other academic term you want to use will not change anything. You might as well have gone to Vegas with it. (Although, with that much cash I think we could afford Monte Carlo.) You have to do something else. You have to make the general public at large feel like it's going to be ok. Bloviating about capital injection and other jargon isn't going to get people to go out and buy anything. More below...
Franklin Roosevelt faced a similar problem coming into office after the affects of the crash had nearly devastated the country. Unemployment was rampant and there was zero confidence. By basically rebuilding and building the infrastructure we now ironically have crumbling some 80 years later, he changed the psychology. With a job, surprise, you can afford to purchase things. With a job, you feel better about yourself and your country. Our grandparents and great-grandparents generation literally and physically helped re-build this nation together. This in turn allowed business to grow again, (again because of consumer spending) and eventually turned the economy around.
Obama has briefly mentioned about the need for a public works project to rebuild our ailing infrastructure, but I propose something larger. Take those billions we are about to waste and do something brilliant with it. Let's finally break free from oil and build the next generation of autos that GM and the other companies have ready to go with plug-hybrid and plug vehicles running on lithium-ion batteries. Let's also rebuild the country that has been slowing falling apart during the last several decades. This is a much better use of money and will actually turn around the country. Otherwise, no matter how much money you hand over to banks and other institutions, if the consumers psychology is not repaired they aren't going to be buying anything, especially Wall Street and Washington b.s.