The Great American Stimulus’s

     How much is enough? Face it, we’re printing money because that’s the only way we’re going to get any more of it. Where is it supposed to come from? Historically, when a third world’s failed government starts printing money it soon takes a basket full of the paper to buy a loaf of bread. Enter our Chinese pals with buckets of cash.

   Between the Chinese and the Arabs we are literally between a rock and a hard place financially. We have stopped producing many goods for export ah, with the exception of jobs.

    JoeSixPack.BIZ advocates loaning his local bank some Stimulus money, lowering the bank’s rate to 1% and mandating they loan all the money to you and me at no more than 2.5% with a maximum loan of $25,000.00 and a term of repayment to be no less 48 months. I don’t know how this could be bad for the economy. But I would sure like to get my hands on some of that low interest rate money THE FED loans to the banks so that the money does get to MAIN STREET instead of Wall Street.

   To understand the stimulus packages that Congress has passed under both President Bush and Obama is sort of simple. The first part is pure politics. If you have played the game and have access to or are yourself a member of Congress (not likely if you are reading me on any subject) you stand a chance of billions of BRAND NEW DOLLARS being directed your state’s way. The greater allegiance you have shown to the ruling members the greater the amount of money going your state or community’s way.

   This is new money they are borrowing though. How? From who? Are they really running a big shell game? Let’s see if I can answer this question. So the plan to overhaul our economy is from THE FED or the Federal Reserve’s Monetary Policy. Remember the oversight of this organization is Congress so you’re your hand on your wallet event though that is a useless endeavor with them. Here is an excerpt from THE FED’s in house publication you can download free at www.federalreserve.gov

   Lower consumer loan rates will elicit greater demand for consumer goods, especially bigger-ticket items such as motor vehicles. Lower mortgage rates will make housing more affordable and lead to more home purchases. They will also encourage mortgage refinancing, which will reduce ongoing housing costs and enable households to purchase other goods.

   OK, this makes sense, how much can you buy if your paying 24% on loan shark style credit card? Congress could cap these type of interest rates. Remember JoeSixPack.BIZ advocates a $25,000 per credit worthy household loan at 2.5% to help them get rid of these balances and to help them buy some more hedonistic consumer goods to get this economy moving again.

   Right now you (3/20/2009) get a home mortgage at 4.95%. If there is money to be made at these low mortgage rates then why allow the stupid to hang themselves. A low mortgage rate puts the carpenter and plumber to work building homes. It keeps the bank officer processing home loans. It drives up sales at the hardware store where the new home owner buys a hose to water the new lawn. Plus long time homeowners can refinance their home loans and pay off short term high interest loan shark style credit card debt.

   Suddenly cars made by GM, Ford and Chrysler will be purchased more often because of these LOWER FEDERAL INTEREST RATES. This would enable them to pay back the Bail Out Loans they got. So the economy is like a circle. I see. If you leave one part of the population out of the equation they are either on the outside of the circle or surrounded. Power to the People, Loans to the People.

A hand up not a hand out.

   Uh oh, wait. In the Fed’s very own book (remember it’s free to download) it states; Lower interest rates in the United States will lead to a decline in the exchange value of the dollar, prompting an increase in the price of imports and a decline in the price of exports.

   Heaven help us! This means you and I will pay more for the “Made Somewhere Else” crap we buy at Walmart. Traveling to destinations around the globe will cost us more. More foreign tourists will find our shores affordable (not a bad thing) and flock here.

   Somewhere a European banker is wrinkling his nose up at this plan. Oh, well better we leave the heavy lifting to our Treasury Secretary and resident Tax Cheat, Timothy Gietner.