Thoughts On Finance

We all know that the financial status of the country and the world, is grim at best.  In these trying economic times it is important to remember that there are people who are worse off than you are, and it is definitely a time for giving.  Giving is not just something that you do for others, but also for yourself.  With so many people falling on tough times, it is important that as we go through this holiday season we remember that things could be worse.  If you are lucky enough to have friends and family to spend the holidays with and you have a few gifts under the tree, then be sure to give back.  You never know when you will need help, so giving can be a very important thing.  We all hope that if we are ever hit hard enough that there will be someone willing to lend a hand.  Just think about all the people who will be unemployed this holiday season, without work, struggling to pay their bills and completely unable to buy any sort of presents for their children.  Think of all the soldiers and their families who will have to celebrate the season without their loved ones.  Think about all those who have lost a loved one, in the war or otherwise who will never spend another holiday with that special someone.

This year, buy a few less gifts for your loved ones, and instead donate to a charitable organization that will help out those who are in real need this holiday season.  It is not too late.  Give a little or give a lot, but definitely give.  After all, giving is really what the true spirit behind Christmas really is, and although it may mean forgoing something you really want, your heart will be warmer on Christmas knowing that you made someone else’s day a little brighter.

There has been a lot of press given lately to the fact that the major auto manufacturers, General Motors, Ford and Chrysler are asking for a 34 Billion dollar bailout for their companies.  As are many average Americans, I sit and wonder why it is the average American’s are struggling but the big companies can get help, and we sit completely helpless, waiting and hoping for things to turn around.

Unfortunately, I have learned that the main reasons that these bailouts are necessary is to save the overall economy of the country.  I did see that with the banking and credit industry, however it didn’t make as much sense to me when it came to the auto industry.  Sure, I could see that it was going to put the people in the auto industry out of work, which obviously would cause great economic hardship, especially in areas of the country like Michigan who rely on the auto industry to support most of the other businesses in the communities, however, I was really unaware of the ripple effect that the destruction of this industry would have across the country.  The fact that I didn’t consider and really was completely unaware of, was the fact that the US auto manufacturers are the biggest purchasers of American-made steel, aluminum, iron, copper, electronics and plastics. The decline of the American auto companies is one of, if not the most important, areas where our economy is struggling.

Expert financial analysts predict that allowing the US Auto Industry to fold would be one of the biggest hits to this country’s financial state that has ever occurred.  They feel that in order to keep the economy even remotely stable it is going to take a bail out of significant proportions of the US auto manufacturer’s.

Most American’s are thinking that with a National Debt of over 10 Trillion dollars why is this guy already spending this much money when he hasn’t even taken office yet.  Well, on some level, we all are aware that spending is actually what keeps the economy going, but let’s face it, we also know that we need our money right now, and most people are not running around spending all that they have.  So why does Obama think that his stimulus package will work when Bush’s didn’t.

The answer to that is both complex and simple.  When Bush set out to stimulate the economy, he did so by sending checks to individuals and families.  Great in theory, however most American’s who were already struggling used those checks to pay bills or stashed it away for a rainy day.  Therefore, we did not all run out and shop for new items and that in turn did not do for the economy what Bush had hoped.

In Obama’s plan, which does include checks to the American public, it however does not rely on them to be the stimulus.  It is offering a much more comprehensive and multi faceted approach to stimulating the economy which includes sizable tax deductions for businesses for each new employee they hire on.  This will help create jobs, which in the long term seems like it will have a bigger impact on people’s spending.  After all, you can’t be out spending if you don’t have a job at which you can earn some money.

If you look over the plan you will in fact see that Obama’s plan will help stimulate the economy which will not only help the individuals but also the businesses and the unemployment rate.  Overall, this plan is cheap compared to how much Bush has spent on bail outs in the last three months.  At least the Obama plan stands a chance.