Wednesday, October 22, 2008

The Economy, the Election, and What it means for Us

Continued from yesterday...

So what does the upcoming election mean for us as Americans? I personally don't think it really means all that much. I know that people get passionate about their favorite candidate, and sometimes are very vocal, but I don't feel that either of the major party candidates will be a good choice.

We have allowed our leaders to destroy the Democratic process by our apathy. We just don't care what they do in Washington as long as they give us money every now and then and stay out of our way. We do not care that they are bought and paid for by lobbyists and special interests groups. On a local level, we do not care that lucrative state and county contracts go to good friends and relatives instead of the lowest bidder or the most qualified. We do not question where the campaign funds come from. We just don't care. And as a result, the only people who want to become politicians are those who are in the business for personal gain, not for the want to do good.

What it all boils down to is that politicians, as a species, are not politicians so that they can help the people. And that being the case, one is just as good as the other. Either way, the American people lose.

The US economy is in such bad shape from lack of oversite, that there will not be a good or easy way out. The economy will collapse. How far, and for how long, is really the only question. Home prices have been way, way over-valued for the last 10-15 years so the local governments could collect higher property taxes. Gasoline has been over-taxed so the DOT could collect more money to pay civil engineers to design new bridges and roads that we have nowhere to put. Income taxes have been raised time and again to pay for social programs that encourage people to not work and have more babies instead of training them for good paying jobs. The Social Security Program has been tapped into for decades to fund congressional pet projects instead of being used to keep healthcare costs for senior to a manageable level. Farmers are being paid to NOT grow certain crops to keep the prices artificially high instead of letting the market take care of itself. Factory farms are pushing traditional farmers out of the business through over regulation and higher production costs.

Every dollar you earn is taxed a minimum of 4 times. Yet we are going to pay $700 BILLION to bank CEOs for driving their businesses into the ground. Where is that money going to come from? You guessed it, higher taxes...again.

Higher taxes mean fewer jobs. Fewer jobs means higher unemployment. Higher unemployment means more people default on their loans and credit cards. More defaults means more banks will fail. See a cycle here?

My guess is that it will be a very lean Christmas season for retail sales. And come January, credit card companies will start failing. That will mean all the people who live on their credit cards will no longer have access to credit. It is very possible that the card companies will demand payment in full. That would mean that every card that you have a $2000-$10,000 balance on will say, "Pay it off now or we will sue." Blood from a turnip I know, but if they get a judgment against you in court, they can seize your assets to settle the debt. Like your house, your kid's college fund, your IRA. See the picture? And the government will be on their side because they do not want the banks and card companies to fail.

Your best bet is to do what every you have to do to pay those suckers off and never look at a credit card again. Pay cash. Or use a debit card. Or better yet, do without it if you can.

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