Lack of confidence in the Administration continues

Are we moving toward a cash and carry economy?

I see friends emptying 401Ks to pay off credit cards and others who are seriously discussing bankruptcy after extended periods of being unemployed. Their confidence levels mirror the downward path of the stock market.

I know at least one person who still has a job because of programs that Obama has funded.  She is an employee of a government agency and she provide needed services for veterans. She is now the sole support for her family because her husband has been laid off.

The news is not all bad, but business is way down and money is very very tight. If a check does not clear as expected, it causes noticeable ripples. In the past, volumes were high enough that one check delayed in clearing was not a big problem.

Credit card companies are revising their policies and raising their interest rates and penalties. There is a growing incentive to move toward a personal cash economy. Pay for what you need and hold off on things you do not have cash for.

In our family, we find ourselves making decisions every day that limit our buying to absolute necessities. Eating out is a rare occasion. Much of the time we pack a lunch if we are traveling during the noon hours.

Household expenditures are limited to those things that will feed us and keep the house and cars running. Our business expenses are limited to supplies and services that will actually produce revenue.

The net result is that our expenses are being reduced to stay in line with our reduced family income. At the same time, we are doing everything possible to generate more income. I see a lot of families in this area doing the same.

I do not feel that borrowing money from our grandchildren will get us out of this situation and I wish that our current administration felt the same.

I do not think the stock market will turn around until the current administration cleans house and restores confidence that laws apply to elected and appointed officials as well as taxpayers. Continuing the current course of action could bring the Dow Industrial Average down to the 5000 range.

Comments

[Michael Kohne]

The Dow may well see 5000 before this is all over. I personally feel that at this point we'd be far better off discontinuing life support for corporations 'too big to fail'.

Put the money into extending unemployment benefits, and let the things fall over. With the walking-dead corporations out of the way, the ones that are smart enough to stay in business can grow into now-vacant parts of the market.

Propping up the failures with government money just prolongs the inevitable - these entities aren't smart enough to survive on their own, or they wouldn't be in this mess. Further, using government money to prop them up continues to distort the marketplace, making it hard for anyone with an actual plan to succeed or fail on their own merits.

On the flip side, I don't think anyone should be looking for a return to the standards (cheap credit, free spending, high debt, Dow at 10K) of the bubble years.

There was a big con going on in the banking sector, where money was being pulled out of thin air. Now that con has been exposed, and everyone should be looking to keep their expenses in line with their income.

At this point, the BEST thing we can all do is to live responsibly. And the best thing the government can do is to let the losers fail, so that the winners can get some traction.

[Margaret]

I couldn't agree more! And to go along with all these worries new and added health issues arise. I find that it is hard to try to take it one day at a time. I try not to picture what things will look like in a year from now, and anxiety sets in and I'm experiences twitches in the eye, tightness in the chest and a huge desire to hide behind food. Sure hope we see some positive changes SOOON!

[Perspective]

I've done as many of the right things as I can...saved diligently, invested conservatively, limited family spending, (but have no pension and limited income) etc. But I'm losing big every day. And, I think we all underestimate the effects of big company failures on our personal savings, 401Ks, public pension plans, and other unanticipated costs. I feel powerless...except to: Get some exercise. Enjoy the outdoors. Stop watching the evening news and stop reading the doom and gloom in the papers and on the internet. We need to be thinking about what small contributions WE can make locally.

[Brad]

Personally, I don't see anything wrong with cash and carry. I do on occasion buy on the internet but not until after searching the local businesses in my small town for what I need. Those businesses will often offer to order the products for me and keep them on hand. Yes it may be a bit more expensive but it helps keep the mom and pop shops open. Purchasing on the internet also requires a credit card, and those have gotten many folks in over their heads. I agree with the other commenter that we need to turn off the TV and stop believing that we need everything we see. Buying from businesses, farmers, and artists locally, and entertaining ourselves locally is what keeps each of our particular locals unique. Otherwise we'll all look like "Anywhere USA".