Immediately following the President Obama’s signing of the Stimulus Package, otherwise known as the “American Reinvestment and Recovery Act”(full text here), Wall Street Reacted by taking a sharp downturn on Tuesday, falling 297 points to close at 7552, the lowest level since 2003. Some may argue, that Wall Street symbolizes the wealthy, (which is what a certain political party is banking on), however, the fact remains that most pension and retirement plans, public and government, are tied to the fortunes of the stock market – the more the term “nationalized” is bandied about the more Wall Street reacts.
In addition to dwindling retirement holdings, middle income consumers are also facing an increase in the interest rates on credit cards. Interest rates have doubled on some cardholders, regardless of credit score - this from banks who were on the receiving end of hefty bailouts. What to watch for: rising rates on Certificates of Deposits. During the Carter Administration, (there are some interesting parallels) interest rates on CD’s (for those who had the money to invest), rose to double digits. Unemployment was through the roof, and inflation (on the rise now), went to the double digits. Also impacted rates on new home loans (21%) and used car loans (26%).
No one knows this better than those in the trenches – pouring good money into bad ideas, (or time-tested methods that have failed in the past), are known to those in the economic trenches. This week, CNBC’s, Rick Santelli, “lost it” on the floor of the Chicago Exchange. In a rant on the home mortgage bailout, Santelli was joined by traders on the floor booing in response in response to the mortgage bailout portion of the Stimulus plan, cheers went up when Santelli suggested a Chicago Tea Party (the original Boston Tea Party a direct result of taxes levied on the American Colonies, that certain Patriots refused to pay. The taxes were assessed to reimburse England for the costs incurred by the colonies during the French and Indian Wars. Logic follows that the founding fathers in Boston, MA we’re basically tax dodgers – and our Great Nation was founded on the principal of Tax Evasion. (Or, in this case, Mortgage Evasion.)
CNBC has a poll up (here) which asks respondents if they would participate in the Chicago Tea Party. The non-scientific polls indicate that 92% of respondents would, indeed, like to join in. Where is the confidence in our Government to haul the private sector up out of the mire (originally created by the Fannie Mae and Freddie Mac fiasco), and on the road to recovery?
To those with any sense of history, specifically as regards to the ups and downs of the American Economy since the first Tea Party, it is a general rule that government intervention is sometimes required, but in the form of oversight, not direct intervention and ownership of programs that create massive deficits that benefit a few, and hamstring the majority with – taxes. When the tax base erodes, due to high inflation and loss of jobs (due to overtaxed corporations taking their business elsewhere or closing all together), there simply will be no money left to support these programs. Enter true middle class tax cuts in order to stimulate the economy – but that won’t take place unless there is a revolution of sorts, in the next two general elections. One would hope that given time, this stimulus package would provide some relief, albeit temporary to those who truly need assistance, and would act to jump start a very troubled economy. It is not an overnight process, that said, American’s, in general, are not patient people, seeking the quick fix, from a President whose approval rating continues to decline, dropping an additional 5 points to 60% this past week , because expectations were based on the “hype” of hope and change, not the reality of governing. The question remains, will the backlash continue, and will more “Tax Tea Party’s” be on the horizon?
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment