The Economy's a Wreck, But We Can Fix It

Yes, It’s A Wreck, But We Can Fix It

NEWSWEEK

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For years, regardless of the business cycle, American consumers were the Energizer bunnies of the world economy. Their spending kept it going. But now the Energizer bunnies have turned into scared rabbits, and they're going back into their holes. The global market is less dependent now on American consumers than it was 10 years ago—consumers in China and India and Europe now comprise a significant force—yet Americans remain at the center of global demand. So when American consumers slow down their purchases, the entire world economy slows.

What to do? Trust can be restored only if we have better regulation of Wall Street in order to avoid the sort of bubbles and Ponzi-like schemes that have generated this credit crisis.

But we also need to get money back into the pockets of average American consumers. That means major public investments in job- creating infrastructure and affordable health care, as well as a more progressive tax code.

There Never Was a Plan
Allan Meltzer, professor of political economy at Carnegie Mellon and visiting scholar at the American Enterprise Institute
The principal problem with the $700 Billion Paulson plan was that there was never a plan. Proponents were unable to explain how the plan would work or why it would work. Instead of developing a plan, they spread fear and anxiety to gain public support, talking up Depression, job losses, and employers unable to pay wages. A falling stock market heightened public concern for pensions.

Alas, the stock market continued to fall after Congress approved the program, not least because the bailout was never supported by an explanation of how buying mortgages would help firms to borrow for payrolls and inventories. Then the Federal Reserve found it necessary to support the commercial paper market, where firms in fact borrow money to finance payrolls, employment, production and inventories. Passing the bailout did not solve that problem.

Democratic governments should never use fear to frighten the public into accepting a program that most knew for what it was—a bailout of the lenders who mismanaged their business. The problem isn't the mortgage market. The mortgage market reflects the problem in housing.

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Paulson is a train wreck happening as we speak!! Helping ease credit will not work when people have no jobs to get credit. We need jobs; jobs create wealth and spending and borrowing. Without them, all the money being issued to prop up our economy only, as usual, helps the affluent!! Asking them to borrow, when they have no means to pay back is like asking a bull to step inside a china shop and expect no damage. This is NOT rocket science; it is common sense, which unfortunately Mr. Paulson nor anoyone associated with this administration and this plan, is purely lacking!!! PEOPLE NEED A HAND UP RIGHT NOW; PEOPLE NEED JOBS TO RENEW THEIR PRIDE, TO SAVE THEIR HOMES, TO PURCHASE!!! tHIS IS THE ONLY THING THAT WILL BRING US BACK, NOT ASKING US TO BORROW MORE!!!

Please investigate this idea to help American. A straight fix is better than working all around the problem. To create main street jobs, have middle Americans to put money back into the economy, and get rid of fear, will be to stabilize the American people first. Could this work ? A stable home could stimulate the economy. Instead of working all around the problem, The government should use taxpayers money directly on the taxpayers by paying off our mortgages to be paid back to us taxpayers with little or no profit at first. Start by fixing the root of the housing crisis will implode new money as well as bailout money into the economy at the same time. Free American families from the threat of becoming homeless will have Americans ready ,willing, and most of all able to help our economy out of crisis. Middle class and upper class united will be a blessing for the American economy. Freeing up cash to spend is better than trying to freeing up credit to charge, because, the misuse of credit is the problem. 911 has proved that we all are Americans and we will come together for the greater good of America because we all know that together we stand, and if we stay divided we will all keep falling. Even the wealthy can lose parts of their American dream. Our government MUST invest in the American people ,in turn, the American people WILL invest back into America. When everyone unite for a common good you get results. We MUST stop giving presidential power to the industries to help Americans. The power of America belongs to WE THE PEOPLE OF AMERICA. In return we can install solar panels, buy hybrids , conserve energy, create jobs, and invest in our American economy while being lead toward a unified America . Industries are getting taxpayers money to help us, but they are mostly helping themselves. Let's take the straight and narrow fix. Taxpayer money to taxpayer mortgages. This will pay only principal money, and banks only lose the rest of the interest. Homeowners in trouble due to the fault of the economic meltdown still owe the principle but at 1% for 3 years and in return we will be able to buy things, not charge things, to turbo charge the economy . banks will be saved because they will get their money back, and jobs will return because we have a demand for services again. To be productive, please add ideas that could help even more americans. we have to start somewhere. Be constructive not destructive and pass it on for more construction THANK YOU!

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Posted By: kpwood @ 03/23/2009 11:28:14 PM

I believe two things would tremendously help the economy back onto it's feet: 1) Stop laying people off and hire people. Most companies laying people off are still posting profits each quarter, USE THEM. 2) Bring jobs back from overseas. Bring back help desk and manufacturing jobs to Americans, bring money back into America. Then, and only then, will there be money to spend in America.
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Posted By: 4carol @ 11/25/2008 3:55:15 PM

Paulson is a train wreck happening as we speak!! Helping ease credit will not work when people have no jobs to get credit. We need jobs; jobs create wealth and spending and borrowing. Without them, all the money being issued to prop up our economy only, as usual, helps the affluent!! Asking them to borrow, when they have no means to pay back is like asking a bull to step inside a china shop and expect no damage. This is NOT rocket science; it is common sense, which unfortunately Mr. Paulson nor anoyone associated with this administration and this plan, is purely lacking!!! PEOPLE NEED A HAND UP RIGHT NOW; PEOPLE NEED JOBS TO RENEW THEIR PRIDE, TO SAVE THEIR HOMES, TO PURCHASE!!! tHIS IS THE ONLY THING THAT WILL BRING US BACK, NOT ASKING US TO BORROW MORE!!!
- Reply
- Report Abuse
Posted By: SC-HOPEFUL @ 11/13/2008 9:13:39 AM

Please investigate this idea to help American. A straight fix is better than working all around the problem. To create main street jobs, have middle Americans to put money back into the economy, and get rid of fear, will be to stabilize the American people first. Could this work ? A stable home could stimulate the economy. Instead of working all around the problem, The government should use taxpayers money directly on the taxpayers by paying off our mortgages to be paid back to us taxpayers with little or no profit at first. Start by fixing the root of the housing crisis will implode new money as well as bailout money into the economy at the same time. Free American families from the threat of becoming homeless will have Americans ready ,willing, and most of all able to help our economy out of crisis. Middle class and upper class united will be a blessing for the American economy. Freeing up cash to spend is better than trying to freeing up credit to charge, because, the misuse of credit is the problem. 911 has proved that we all are Americans and we will come together for the greater good of America because we all know that together we stand, and if we stay divided we will all keep falling. Even the wealthy can lose parts of their American dream. Our government MUST invest in the American people ,in turn, the American people WILL invest back into America. When everyone unite for a common good you get results. We MUST stop giving presidential power to the industries to help Americans. The power of America belongs to WE THE PEOPLE OF AMERICA. In return we can install solar panels, buy hybrids , conserve energy, create jobs, and invest in our American economy while being lead toward a unified America . Industries are getting taxpayers money to help us, but they are mostly helping themselves. Let's take the straight and narrow fix. Taxpayer money to taxpayer mortgages. This will pay only principal money, and banks only lose the rest of the interest. Homeowners in trouble due to the fault of the economic meltdown still owe the principle but at 1% for 3 years and in return we will be able to buy things, not charge things, to turbo charge the economy . banks will be saved because they will get their money back, and jobs will return because we have a demand for services again. To be productive, please add ideas that could help even more americans. we have to start somewhere. Be constructive not destructive and pass it on for more construction THANK YOU!