18 01 2011

Every time I turn on the TV or look in the newspaper, I see another story about  how things have turned around and are much better now.   Not So!!  Those comments are put out for your benefit to make you want to spend money and thus get this economy moving.  But the problem nowadays is that people are smarter than they used to be.  So they are not spending much of their money – anywhere.

Until the present administration wakes up and smells the bacon, nothing is going to happen.  A salesman once said – nothing happens until someone sells something.  That is absolutely true.  No money moves.  No products move.  Nothing improves until someone sells something.  Then the economy and all its parts slowly start turning once again.  No money though, equals no sales of any products. 

This administration thinks that if they take everything away from the individual and give it to the government, then people  will turn to the government for their every need.  Not in this country.  Americans appreciate their individuality and protect it in their lives.  Obviously, there are certain classes of people nowadays who sit stoically with their hand out, waiting for their government dole.  But for the most part, Americans prefer to make their own way.  They don’t want that government dole.  They want to run their own lives, including how and when they spend their money.  

 Real progress cannot start at the bottom and work its way to the top.  Economic progress must start at the top and work its way down to the bottom.  This country runs on investments.  This is the crux of capitalism.  We must have investment from the top in order to put the people  to work at the bottom. Investments must be made at the  city, county, and state levels.  Then those wheels start to turn.  This means that if  any government wants real progress, they must start paying some decent interest on the investment of money.

 For instance, if your town wants to build a new school, they must instigate a bond issue.  The bonds are put out for sale.  The investor will then buy the bonds, risking his money up front for the building of the new school.  Without this investor’s money, no school can be built.  Investors are not going to invest their money until and unless they can make a decent return of interest on the lending of their money.   This is a simple economic fact.  They must have a decent return in order to risk lending their money.  Thus, the economy has come to a stop because of the lack of decent interest on investments. 

This administration has a theory that the lower the interest, the more the economy will bounce back.  That is erroneous and devastating to the economy. An investor cannot succeed on an interest rate of 1% or even 2% if he then has to pay half of that in taxes to the government. Some relief should be forthcoming for the investor.  It may be in the form of a ceiling on a higher interest rate, or  more tax free investments.

Even your local bank cannot pay a decent interest on their Certificates of Deposit until the government starts paying a higher interest on investments. Thus, everything sits at a standstill until sometime, somewhere, someone gets it in their head that nothing moves until somebody sells something.   This means nothing will move until someone somewhere starts paying a higher interest rate and gets these wheels turning again.  Then selling will begin again, too. 

Think about all this and write your congressman.  Tell him what you think about the economy.  Remember the vote of 2010 and continue to remain interested and vocal about your concerns.    

I’m planning on a great year with an end to this economic downturn.  Tell your congressman that you are, too.