Bailouts, Stimulus Money and the Like

All these bailouts makes me dizzy. It started with the almost $800.00 billion Stimulus package designed to help the Wall Street and then Cash for Clunkers came and then the unemployment benefits extension (which I kind of favor) and then it is the first time home buyers credit, and then the $1,500.00 home appliances credit, the auto bailout and now there is talk of giving $250.00 to senior citizens since they did not get any raises in their Social Security checks. Man, when is this all going to end.

Granted we are in the worst recession since World War II but do have the money to pay for all this in the future. As far as I know we are selling IOUs to the investors in order to stimulate this economy and still only a portion of it is working.

Apart from some Federal Stimulus money, home buyers credit and Cash for Clunkers and the auto bailout, the unemployment is still a high 9.8 % (although I doubt it that it is that low since it is based on surveys of households).

Although it is too early to know what the ultimate impact will be of the government efforts to fix this massive recession, we can still decipher the ones which have been implemented thus far and showed results.

The Cash for Clunkers was a huge success but it ended too early and artificially raised the sales of cars. It was not that expensive or expansive to begin with and was done under pressure to help the car dealers who were left hanging in there when Car Companies announced that they will shut many car dealers.

First time home buyers credit helped to somewhat stabilize the housing market. But as the research showed most of the credit went to people who would have bought the houses whether they get the credit or not. Again it was done under the pressure of the real estate agents and housing industry. No doubt it helped but foreclosures are still coming and it will keep on coming until the housing market comes to terms with what I called a huge imbalance between what the houses are worth and what the average family or individual is willing to pay or have the means or earnings to pay for it. Remember it is now a Buyers market.

In order for the hosing market to stabilize the government has initiated a loan modification program, but it was designed for people who houses are under water(meaning they have more mortgage than the house is worth) and as some people say they took more than they could chew. But this loan modification is worthless if people don’t have jobs to support this lower interest payment. Ultimately it comes or boils down to this simple and true fact. WE NEED JOBS.