STIMULUS, SWIMULUS, OH NO, NOTHING HAPPENS NOW

The government has now spent our money, our kids money and their children's money and their children's money on a STIMULUS plan.

Now mind you that NOBODY knows what it really is, as the drafters have not "read" it, before leaving on world-wide junkets. They voted for it however....and like the dummies that they are, they do not know what is really in it...in its fine print.

One thing for sure though is that we will average $13 a week in that bill just for us, to spend as we see fit.

No government program will stimulate the economy...it will help a few road-building companies, and it will pay some past due Medicaid bills to doctors throughout the states that have not paid their bills.

But it WILL NOT make anyone, in the general population feel stimulated. Correct that, those recipients of SS benefits and disability payment recipients will get about $250....that's just about enough to pay about 15 days worth of heating bills this winter.

The plain fact that our politicians do not understand is that the world is oversupplied by goods, goods made in countries with cheap labor.

These goods are in over-supply, and they compete with domestic produced products.

So, to make this simple, as the economy is stimulated, which goods will you buy...the more expensive domestically produced goods, or the cheaper versions flooding our stores to compete for your stimulus dollars...those $13 weekly dollars you have to spend now?

The government programs that were announced will do absolutely nothing for the economy, and will not stimulate any consumer spending, other than the $13 weekly, which will probably go towards the interest paid on your credit card bills.

Are the people we elected this clueless?

Yes, apparently they are...at least those who voted for the STIMULUS.

Oversupply is a problem. One can boost demand, but what will the stimulated consumers buy?

It is not likely to be a GM car since it is too expensive for people whose FICO scores just tanked, and their home was foreclosed. Count those people out...that is probably about 30 million people, that is fully about a third of all working Americans.

The world can produce 90 million new vehicles annually, it however will produce about 60 million, if that in 2009. Add to that the problem with a lack of financing, and you got nothing stimulating demand.

The resulting lower prices for all types of goods will be great for consumers, since everything will cost less...but these goods will be competing for the consumer dollars with domestic producers and foreign producers including car makers and steel producers, and producers (manufacturers) of just about everything.

Keep in mind that there will be plenty of products, mostly foreign, and they will be demanded to be sold at the lowest possible price.

So how is this going to stimulate anything?

Here is the second part of all this....

The domestic manufacturers will start showing losses, and that in turn will cause their banks to restrict lending to losing companies, which in turn will cause them to lay off employees.

Now multiply this by 13 million businesses in America. If each business only lays off one employee, that's another 13 million unemployed!

Do you think that each business will only lay off 1 employee?

The credit crunch will get worse since the requirements for every well run bank would be to lend to profitable businesses, and therefore they will restrict lending to marginal businesses, and those businesses will have to lay off employees.

Is this becoming clearer? The government is only lending money to businesses that are losers, yet the banks can only lend to businesses that are not losers....so go figure.

Our government is NOT supporting the lending to strong business that can prosper and survive, they are instead lending to the losers, and restricting lending to the marginal businesses or the profitable businesses by advising banks to be careful who THEY lend to.

Go figure...feel stimulated yet ?

Lost in Manhattan