Economics

What Will Get the Economy Growing Again?

According to MoneyMorning.com “Billions in Bank Rescue Funds are Fueling Buyout Deals, and not the Increase in Loans That Would Help Ease the Financial Crisis”. These banks need their hands slapped. This $250 billion recapitalization fund is being held by banks and being used to buy out smaller weaker banks to eliminate competition. This recapitalization package is supposed to pump money into the banking system to stimulate the economy. Displacement of funds will cause business failures and additional foreclosures (i.e. www.BuyMyHouseBeforeTh...) and cause another need for a cash infusion by taxpayers into the banking system.

This is not a consumer driven recession. Consumers have been stripped of their wealth by special interest driven legislation, wars, unchallenged illegal immigration, cheap foreign labor, offshore manufacturing, and predatory lending practices by financial institutions.

Too much of consumers' money is going to pay interest. Government legislation, the Fed, and the banks have stripped consumers of their wealth. The economy will not recover until consumers do. Lowering the interest rate and throwing money at banks and other corporations is not going to fix the problem. It is only going to make matter worse when the resulting inflation sets in. Banks are going to have to take their lumps along with everyone else. To reduce the severity, banks need to lower interest rates on credit cards, mortgages, personal loans, and lines of credit. Congress also needs to stop fooling around with things that stimulate the economy like tax credits for renewables and they need to stop bringing cheap foreign labor into the country.