Thoughts On Finance

Our government is in high panic mode trying to fix the current financial crunch that we are in.  I am just wondering why no one saw this coming.  It only makes sense that we have been pouring out Trillions of dollars on fighting terrorism and the war and we have been doing this for the past 7 years.  It only stands to reason that over time we are slowly but surely going broke.  Honestly, if you look at things however, this really was coming to this point before September 11, 2001.  If you look at the trends in banking and in the economy, you can honestly see that interest on bank accounts took a nose dive around the mid 90’s.  Back in 1989, your interest on an average checking account was 5.14% and an average savings account was 5.5%.  Money markets and CD’s went up to on the average about 8-9% depending of course on the term.  Now you are lucky if you are getting about 1% interest on your savings.  This decline started before all this terrorism stuff came to a head.  Didn’t they see this was happening? Didn’t we? I guess I just think that better financial planning could have gone into this.  It is like our government has bounced a million checks in the past week and they are scrambling to figure out where they are going to get the money from quickly.  I just would like to think that our government had a better handle on their finances than this.  It really just seems to me that they could have planned ahead and seen this coming.  I guess with credit card companies charging exorbitant fees and banks charging equally exorbitant fees and interest rates, it seems to me that they would be doing well, but I guess not, which in essence means that the money that we think we have in the banks is really gone.  I am sure in this financial whirlwind that we are in, if we all went to the banks and tried to get our money out, our government would be in quite a pickle.  In any case, I really think that someone ought to be held accountable as this problem didn’t just happen over night, and it probably won’t be fixed over night either.

Many small businesses will be hard pressed to survive all the financial turmoil in this current economic situation that we find ourselves in.  Many small businesses don’t provide necessary products and services but luxury ones.  Things like getting your hair and nails done, eating out, and having your clothes dry cleaned are happening less frequent as more and more people are cutting back, so these small businesses need money to keep themselves running and to be able to keep their employees working.  The problem is that normally they would just take out a small business loan to keep themselves a float through the tough times, but with the banking system in turmoil more and more banks are reluctant to lend money and without a source of income for just a few weeks there will be many people laid off and many businesses will be forced to close their doors for good.  The main problem with this is that for the most part the whole economy is slowing and therefore there will be no other jobs for these newly unemployed people, especially in the specialty areas where they have most of their training and experience.  This will create a major unemployment.

Financially we are all thinking, what will happen next week or next month.  Things in the economy seem to be declining quickly and we find ourselves helpless to do little more than watch our lives spiral downward with no end in sight, but what about the long term.

I can’t imagine a world without banks and credit cards, but maybe that wouldn’t be so bad.  I guess we could barter, and return to a world where we actually had human relationships and where people had to be decent to each other in order to get the things they need.  What about all the others, the people who are completely unwilling to give up their lives of complete selfishness and greed.  Will they just steal to get what they want? Will they be able to survive this way, or will their greed just eat them up and spit them out? Will we? I don’t really claim to know how all this mess is going to pan out, but I do know that we can’t just continue to bail out companies and pretend like everything is okay.  They keep talking about a recession if they don’t bail out these companies, but isn’t this just a way of prolonging the inevitable and making things worse.  They say that we need to do this now, but what they aren’t saying is what will come of this debt down the road.  In my mind it is kind of the equivalent of floating a check or paying one credit card bill with another credit card.  The debt isn’t going away, it is just being transferred and it will eventually catch up with us and most likely when it does the results will be way worse than they will be if they let this catastrophe happen right now.

Pretending like everything is fine, will not and does not make everything fine.  These problems are not going away anytime soon, either way.  I am not sure what comes next but I am sure that we must be prepared for some major lifestyle changes or we will not survive it, of this I am almost certain.

I guess, with all the talk about money and finances in the forefront of everyone’s minds, you would think that more people would be taking action and cutting back and saving money now for the future.  This is really not the case because some people really don’t understand shopping wisely and saving money and all that stuff.  It seems pretty simple to me, maybe because I learned from my grandparents, who came from the Great Depression times and didn’t have much money even after they started a family.  Growing up I would hear my grandmother tell stories about wanting to buy a Christmas present for my aunt when she was a little girl and about how they could only afford a doll, but they couldn’t afford the clothes, so she made an outfit for the doll which was my aunt’s only Christmas gift.  I heard stories about adding water to stretch things and making lots of Koolaid to quench the thirst of friends who would come for a visit.  My grandparents now have money, but still do not spend.  My grandmother still recycles her tin foil and uses it again.  She shops a bargain whenever possible and will reuse items past the point of exhaustion.  Since they never really had money, when they did get it, they still continue to act as if they don’t.  This is how they were raised.  Many times when speaking to my grandmother and grandfather about my struggles with raising a family and about having no money, they share stories about wondering how they would pay for heating fuel and about the tough times.  I look at them now and hope that my future holds for me money in it, as they are a true testament to the power of pushing forward and going from have nots to haves.  A rags to riches story that even now, makes you think about how you are spending your money and what you are spending it on.  I am gradually learning how to cultivate my money and keep it going far past where it should.  I am cutting coupons and shopping sales, I am going to yard sales, I am cutting back.  My kids feel it and are hating it, but I can’t just blow money on their every desire, I keep trying to explain to them the difficult financial times that we are in, but I really don’t think they get it.  The time to cut back is now, so start making gifts for Christmas and thinking of ways to reduce costs where ever you can.  This is a time of “Economic Slowdown” so be ready because when things start to slow down, they eventually come to a stop.

Watching the View, I got to hear Whoopi Goldberg’s take on the current financial situation in the US and I found it extremely interesting her perspective on the whole thing.  The truth is she was talking about the government bail out of AGI.  Her point was, which I thought was a good one, was that the government gave $80 billion to AGI for the bail out because we American’s couldn’t pay what we owed, and now that AGI has that money, isn’t that in essence wiping clear the money that everyone owes AGI? Yet, we are not only responsible for our personal debts to AGI, but in addition to that, our government has in fact created a deficit that in turn we the people of this wonderful country are going to have to pay debt, so in essence we now have to pay this debt twice.  It was a really good point and one I thought was worth discussing since actions like this are taken to wipe away the debt for a large corporation or for our Federal Government, however, where is the help for the actual people who are falling deeper and deeper into debt by a government that does nothing but spend, and now even when they are out of money, they are printing more money with no backing to it to bail out large corporations.  I saw on a television show recently, a man suspected of terrorism, and when asked what he had against this country, he said “this is not a country, it’s a corporation.” I think perhaps he is right as a country does not just bail out failing companies and spend it’s peoples money on wars for the purpose of financial gain, it sounds more like a corporation to me, but maybe that is just my perspective on it?

Thinking about finances, brings to mind only one person and that person is George W. Bush.  Even if you think he did right thing taking us into war, which was more of a business decision then an act to protect our country, you still have to look at the way he is running this country and ask yourself if he hasn’t created most of the economic problems we are currently facing.  Sure he would tell you that it was the terrorists that are trying to us in, and in fact NEED to be stopped, but really what has this war accomplished? In essence, it has created US control of middle eastern oil supplies, which has exactly benefited us how? At least when the Iraqi’s were controlling the oil the price was more reasonable, now that we control it the price is going up and up.  The more financial decisions and large corporate bail outs this man makes the more it is costing you and I.  Maybe not today, but in the future.  You can’t just stop companies and the stock market from crashing by printing up money with no backing to make the numbers look good.  That is what is happening here, and in the long run with each move this man makes, dollars come shooting from our pockets.  It is a little bit frightening to me that he is driving us further and further into a depression in this country and either doesn’t know it, or doesn’t care.  It is my belief that it is the latter.  In any case, as a whole, this country needs to put it’s foot down on this man hard.  About two yeara ago there was some talk about impeachment, what ever happened to that thought.  I know that we are only about 4 months away from a new president, but that still gives him a lot of time to do some major damage.  Are we really going to wait for him to completely sink us, just waiting for the new president to step up and fix everything.   Even if we pick the right guy, it will take a long time to undo the wrath of George W.  We are voting for a human being not a miracle worker.

I agree that the financial situation is looking kind of grim, but is there really anything wrong with American’s cutting back on their lavish lifestyles a little bit.  Let’s face it our lavish lifestyles is what other countries can’t stand about us as we spend and spend to have the biggest and the best, while in other countries their people are lucky just to have clean drinking water.  Isn’t it really the truth? I mean if you were the one struggling to keep your family safe from the toxins in their all so necessary water supply, would you not be just a tad resentful looking at American’s complaining about their new plasma TV’s? And what about the poor in our own country, don’t you think that the homeless are a bit resentful as we complain about the price of things but we are still running to the mall to get our kids designer clothes.  I think that as American’s it is time to accept the fact that what they say about us is really true.  We spend money like it is water and most of us have been spending more than we have been making for a long time now.  I am from a simpler time I suppose and really don’t mind cutting back a little, actually I am somewhat grateful for the cut backs that I have been forced to make.  I think it makes me appreciate the fact that I live a relatively simple life, with very little debt and money owed.  Sure I am not saying that if I won the lottery tomorrow that I wouldn’t enjoy it, I surely would, however, I think that living a simple more primative life is more my style and it really does make me appreciate all the non-material things that I have in my life.  So what if I can’t eat out all the time or take my kids to the movies but once in a blue moon.  I guess we will just have to enjoy watching DVD’s, home cooked pop corn and a Saturday night family game of Clue or Monopoly.  A simpler life doesn’t have to be so bad, just look at saving money as a challenge that you are willing to accept.  There are things that you can do to not only save money, but also to help the environment, but the question truly is are you willing to give up your lavish lifestyles, or are you willing to go down with the ship? Consider this your thought for the day.