ECONOMIC PROZAC: DEPRESSED CONSUMERS CAN'T BUY GOODS AND SERVICES

Bail out after bailout of big industry won’t help if American’s can’t or won’t consumer their products

A depression is looming over America. Recession is already upon us and American’s inability to afford their current debts and worse companies’ inability sell goods to them will exasperate the economic woes. Regardless of the American people’s vote, the bailout of big businesses will continue, although I suspect overwhelmingly voters would choose bailing out themselves too. Why is this a good idea?

Much of the trouble with banks, auto manufacturers and definitely retailers to come is that consumers are strapped with debt, having lines of credit and credit cards cut off and can’t squeeze any money out to support the industries being bailed out. This should be at the core of the bailout. My solution calls for a converged strategy where consumers get a cash infusion and loans are provided to failing companies. The convergence occurs when consumers clean up their balance sheets so big business won’t have so many bankruptcies and defaults, the core of the problem, while businesses shore up their balance sheet while assuring more spending in the future that is necessary to bolster sales.

Worse millions of Americans have been burdened with 30, 60, 90 day lates on their credit reports further assuring that future access to loans for houses, cars, appliances, air travel etc.. will not be available for up to a decade. This issue alone will cause havoc long term by denying the fundamental supporters in our economy the ability to consume. Bailouts are only a short term fix. With programs focused on simply cash for the big companies we fail to see the long term problems and the ongoing defaults and bankruptcies ahead.

A balanced approach. If government is going to roll up bad loans, thus far in real estate and soon in credit cards, student loans and all other credit markets, then why don’t they attack the core issue to help every American pay their bills. Removing all late payments from the credit bureau over the past year and insulating the next year is a great way to relieve stress and assure a strong future economy. A balanced approach of spending our money to support industry while giving Americans enough money to pay off their revolving debt, up to 100 thousand dollars, will change the game. Fundamentally another issues looms long term. Our credit addicted nation needs to transition to a savings and investment nation again like prior to 1960. Why doesn’t the government issue economy bonds to US citizens instead of selling and refinancing our debt all over the world. This will provide every American a way to have a nest egg while the government still gets to use the money.

The many ways to solve our economic woes are out there. But if we do not fundamentally release the consumer’s burdens and clean up credit bureau reporting the US economy will suffer long term and assure we sink straight into a depression. The government should be issuing Economic Prozac to assure American consumers will be there after the industries are cleaned up. A fair and balanced approach.