The Stimulus Package Evaluated

I recently read an article about a senior center in Rhode Island that would be closing it's doors for good, even after receiving a recent round of stimulus money. 

This is one way that the stimulus package didn't work to save the economy.  I think the idea was that the federal government would pump money into ailing insitutions and businesses to prevent widespread business failures, and that these widespread failures could  lead to economic metldown.  This was a concept used in the great depression by President Roosevelt to get the economy started again (which was controversial as to whether it worked to rebound the economy back then).

Saving a failing business only prolongs the inevitable, and saves businesses that should go out of business anyways.  It is a sad reality, but pumping money into, for example, a failing bank (this  ought to make you mad) only condones a bank to continue with unethical or risky practices, such as selling and purchasing risky securities and mortgages.  Don't bail out failing businesses, the process of natural selection in the business world will weed out the less efficient businesses.  Personally, I am sad to see billions of my tax dollars go to these huge corporations that took a lot of risk and should have lost out like the rest of us.  In the end, the common person will lose their house and job, but the corporate leader will keep their job and house (and get fatter pockets).

So, what about the community center????  There should be other funding in place through the local governments to assist.  My heart goes out to the community center, but giving them a short burst of the stimulus money without any long term solution really does effect all the seniors that rely on their services.

Here is a link to the article about the Senior Center

Our Economic Problems

           In the news, I am guessing you have seen the endless articles and debates about the economy.  How can we fix it, who can do it, and even can it be done?  I argue that there is no solution.  The economy is a monster that can be swayed one way or another, but no one insitiution or government can make a move to "fix" the economy.
        Let me give you an example, when the Federal Reserve makes an announcement of possible rate hikes in the interest rate, there is major shifts in the stock market.  People make purchasing decisions in the stock market based on interest rates, jobless rates and reports, and presidential declarations.  And, most important of all, stock purchases are largely based on psychology.  Fear of losing money, anticipating the changes in the market, and basic human instinct are a big part of the stock market.  The stock market itself is proved to be the engine behind the economy, yet there is no clear direction of the market and no one way to control it.

Let's look at  all of the failed attempts to save the economy:

• Wallstreet Bailout
• Home Loan Bailout
• TARP

We have all heard the fraud involved with the money given, and how bailed out companies continued to give CEO million dollar retirements, and how these same companies pay out millions of dollar in bonuses. 

So what does work to "fix" the economy?  I say nothing.  The economy is so big and complex thatno one entity can fix what is wrong.  The natural law of economies is that we go through phases of boom, bust, boom, bust, then boom again.  This recession is an effect of the long period of buying overpriced houses, refinancing houses to buy an escalade, and just being financially rediculous for awhile.