Sunday, February 3, 2008

Wylie Coyote Is In Charge-- It's Ok!!

This picture brings to mind the recent actions of congress trying to "help" the economy. It seems like a good idea at first glance, but with every action there is risk and an equal and opposite reaction. So much that comes out of congress seems to equate to running full speed into a dark room without even thinking of turning a light on. What ultimate good does giving a $500 dollar rebate do to help the economy? It is in reality putting a band-aid on a bullet hole. Here in Southern California energy bills have gone up significantly, I can't even imagine what the heating bills are like for a retired teacher living on a fixed income in the Mid-West. When people are making a choice between paying for prescriptions or paying their heating bills, $500 doesn't offer a solution but only a delay in dealing with problem.

In the stock market when a company returns money back to shareholders it is called a dividend. This a great quality of many companies, but it is not a quality equated with growth companies. If the best thing a growth company can do with profits is return it to stockholders, then this company will slowly cease to become a growth company. At the same time the federal government is returning money to "shareholders", it is letting states slide on inspecting bridges and other infrastructure. This is a delay in looking at an area that can cause growth in a troubled economy. Passing a funding bill that addresses aging infrastructure is an area that would provide jobs and domestic growth. Returning $500 dollars that is most liking going to be either used to pay existing bills or spent at Walmart is not going to do anything to solve long term problems for the country or for individuals. What ever percentage of these refunds spent at Walmart, might have just as well been sent directly to China. After all they are the 13th defacto Federal Reserve District.

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