The last two Presidents have made use of this tool and it works.
President Bush used it to get the debate on the first TARP (Troubled Asset Relief Program). Bailout over with and a vote cast before 'it was too late'. Speaker of the House Nancy Pelosi said this 'must' get passed or the economy will face complete ruin. We simply cannot wait or it will be too late. After a quick recess for 2 days, they then voted and the TARP bill passed.
President Obama (President Elect, at the time) said on many occasions that 'this is the worst economy since the great depression' and 'something must be done now', just like the President before him. Now that he is the President, this continues as he goes back on the campaign trail selling his 'Economic Stimulus Package' to the masses. Once again in both Indiana (a town devastated by the loss of the RV industry, yet he fails to state which party was the main cause of that) and Florida, we hear President Obama talking down the economy and instilling fear into the masses that if this bill is not passed we could face economic ruin.
Nancy Pelosi again adds to the fray by stating that every month this bill does not pass 500 million Americans will face unemployment. The fact there are only about 300 million Americans on the planet doesn't seem to bother her, though. The key here is that since Timothy Geithner announced his TARP II, the stock market has dropped almost 300 points. Since Obama (who stated before the election that he would not use 'the politics of old') became the President, the market has done little to correct itself.
As strange as it may seem, the markets are reacting to what the President and government are saying. I'm not saying its the main reason, but they are being affected. If you hear the leader of the free world state how bad the economy is and that if government doesn't take action soon it will 'be the end', how would you feel?
My guess is that you are scared for the future. My guess is that you are holding off doing anything with your money. My guess is you are cutting back, saving money, and riding out the storm.
Now, what if the President stopped saying it was 'SOOOOO' bad, and laid off of the doomsday predictions? What if Obama stopped saying 'government is the only one who can solve this crisis' and started being more positive?
I know so many are saying that, if he did that, he would just be covering up the truth and lying. I can completely understand that, and we don't want a liar for a President, but being so doom and gloom, I believe, is actually keeping the markets down and keeping people scared. What if Obama said it was bad, as bad as it is, but then said we as Americans can get through this. Do not be beaten into submission by what the media says. Do not hide under the bed and wait, we need to get out there, and build on this economy. I know you're scared, and I know you're uncertain, but if we just sit back and do nothing it will get worse.
If you weren't so scared and uncertain, what would you be doing? I personally believe that if people weren't so scared, that they would be out spending in the shops and the economy would be on the up. But with Obama and Pelosi both stating 'this is terrible, its the worst economy since the great depression, we need to spend $1 trillion to fix it, and only government can do it. All I see are scared faces waiting for government to fix it. Truth be told, government caused this and will make it worse with spending their way out of it.
Government is not the 'only one' who can fix this. Look back into history around the time of the Great Depression.Why, in other countries, is it called 'the depression', when in the US its called the 'Great Depression'?
One answer: GOVERNMENT!!
The government programs put forth to 'save the economy' actually prolonged the recession into a long depression. What do we all see at the end of the 'great' depression? World War II. Come forward in time to President Carter. As he was leaving office and Ronald Reagan was entering office, the US was in a deep recession. We've all heard about the high interest rates, gas lines, and unemployment, etc. How did the US get out of that? Ronald Reagan cut taxes, plain and simple. (well obviously he did more, but this is the main factor in growth). Due to this revenues to the government were increased, new jobs were created, and American businesses had more money in 'their' pockets to put back into the economy.
So looking back over history, government spending has prolonged a recession (into a Great Depression), yet tax cuts have helped grow the economy and recover.
As the government votes on the now approximately $800 billion 'stimulus' package, Americans can expect to see about $13 a week extra in their paychecks. Then, come January 2010, this will drop to $8 a week if you make under $75,000 a year. The majority of this $800 billion is not geared towards 'stimulus', but toward more spending what can anyone do with $13 a week?
If government cut your taxes as well as taxes on business....what could you do with more of your own money each month?
Spend more? Invest more? Expand your business more?
What's the difference here? Obama is stating tax cuts won't work and 'only' government can resolve the crisis. This is flat out, and the fear within his statements is making us more reliant on government, making us hold onto our money so the market cannot recover, and furthering the policies hidden with the $800 billion bill (Government controlled health care is one of them, but that is another topic).
In the last few days, it was reported that spending was up 1% and the housing market has picked up. Be very careful how this is interpreted. So far, nothing has been 'done' by Obama and his administration to aid the economy. So, if the market is indeed correcting, then it is a natural correction. We will, of course, hear people say that this is due to government, but be careful.
Do not listen to the fear being broadcast to us by those in Washington. Evaluate your own circumstances, spend and save based on your own thoughts and feelings, and America will recover without government take over.
You are who you are, do not be a part of 'the masses'.
I, for one, will not be participating in this recession.
Everyone else is free to decide, but I'm sitting this one out.
The Arrogance of Power - FEAR! - Tony Leach