Cash Flow

I would like to take the time to put my opinion out there regarding the actual flow of money, when it comes to subjects like ‘stimulus’ or ‘bail out’ money. I know that this subject has probably been beaten to death by all parties in politics, but I would still like to put my two cents out there. I would like to give a short summary of how the economy has been affected, and could have been affected, in my own perspective.

How things have been affected:

Money was given to the banks, several large corporations, and to government programs. Through this plan, the money that went to the banks was supposed to loosen the belts of this industry and encourage lending again. What in fact happened, is that the banks have relieved themselves of stress, and paid themselves large bonuses, and is holding the money for their own personal (bank business) investments, to make themselves even more money. The money that went to the large corporations, was supposed to allow the businesses to prevent bankruptcy, re-tool to expand operations, and in the end provide more jobs in an effort to stimulate the economy. What actually happened is that the corporations, got themselves out of debt, re-tooled, cut jobs, and paid themselves big bonuses. The money that went into the government programs, was supposed to provide more revenue to encourage job creation through repair of highways, and construction of new businesses. What actually happened is the bureaucrats have siphoned all the money for political agendas, cut jobs, cut spending, and have made little to no improvements in this economy.

How things should have been affected:

The ‘stimulus’ and/or ‘bail-out’ money, should have been given to the lower class of society, those who lost houses, and those with less than sufficient income. This would have; allowed people to remain in their houses, allowed people the chance to continue to live like normal people, with a sense of dignity, and most important of all, it would have allowed the average American to have money to spend, thus stimulating the economy. Why should it have gone to the people? People in general, spend. Money spent, reflects in corporate gains, which boosts economic confidence, which in turn allows banks to feel safe enough to lend, which in turn gives confidence to the people on wall street, which makes companies feel more comfortable, and become more willing to hire, thus, boosting the economy.

Summary:

Money will never boost the economy if it is not put into the hands of those willing to spend it. We have paid our share in taxes, so giving Americans the money, is only putting the money back where it came from. Corporations are always going to get their share from spending Americans. Whether it is because we have gone back to purchasing a bunch of frivolous crap, or because they are price gouging our money’s eye sockets, they will always get their share. What has happened is that the customers have been cut out of the equation. As we can all see, that really worked.