Dark Skies ahead for the economy

Thursday, over 500,000 jobs were lost in the United States. Our infrastructure is crumbling. Wall street has become a rollercoaster (or maybe a giant drop). Healthcare costs are rising. 401(k) plans have lost their value. Housing prices are falling while taxes are going up. And the government response? Bailout the financial system. Bailout the auto industry. Did I miss something?

When did it become the job of American taxpayers to help the financial system and businesses correct their shortfalls? Bailing out the credit industry amounts to having citizens pay for the ability to have credit companies charge them money to borrow the money we gave them. Does that make any sense? Complex mortgage-backed securities that have an undetermined value should not be bought by the government, nor should taxpayer money be used to fortify their value. Our government has put investors first before any other group, and, while investment in the global marketplace is important, it was the fault of these systems for not checking the viability of the financial products they were creating. They took a risk and now must pay the piper. These bailout efforts have been passing down the risk to hard-working taxpayers who have to not only bailout the work of incompetent executives, but then also have to suffer job cuts and reduction in pay on top of that.

The Bush administration and Congress claim that the economy will "collapse" if these measures are not all passed, but when a bubble of complex securities and bad debt had been created in an inflated market, it does have to deflate. And after years of recruiting investment in these failing firms and companies, and also telling citizens that the economy is strong, you cannot blame mortgage holders for the collapse of the financial markets.

Political preference in favor of bond holders and investors is the exact reason for the troubled market. Protecting investment from the risks that they face in the market helped to create this bubble in the market. De-regulating to allow for extra risky investment does come at a price, and we are paying this now. Unfortunately, the wars in Iraq and Afghanistan as well as the tax cuts passed by the Bush Administration also have put into trouble the social funding to lessen the blow of a recession. We are going further into debt because of these costs, and now the entire global market is oscillating uncontrollably.

The way I see it, the economy is like a tree. The soil represents to American worker, sunlight represents consumer spending and investment, and rain is federal funding. When there is too much rain, the soil cannot properly absorb it and the ground floods, causing structural damage to the tree. That is why welfare reform was necessary. However, if there is not enough rain for the soil (funding for healthcare, education, infrastructure) the tree cannot grow and leaves shrivel up. When the government favors policies that encourage too much investment, the sunlight also further dries up the soil, and then consumer spending shrinks, lessening the amount of sunlight for the plant. The result is a dry and shady economy where the tree does not grow. An unhealthy tree can also become afflicted with tree rot (due to incompetent manangement) and there are no mechanisms to save the tree. The only way to attempt the growth of the economy is by investing in the people by watering the soil. Give them jobs rebuilding our roots (infrustructure) and preparing them for competancy as an antidote to tree rot (education) and restore their health (with a better healthcare plan).

The greed of business leaders and the ideology of the Bush administration has undermined the power and authority of the United States around the world. Instead of investing in human brain power and innovation to be competitive in the marketplace, leadership simply tried to falsely advert the risk of investment by deregulation and while withholding funding from programs or failing to address real fiscal problems like the healthcare industry.

We need to let the economy return to its normal size without letting it collapse. Time to trim the Bush.