In a recent report about the
Beijing Olympics boycott calls, Boycott Watch stated excitement over they
Olympics can spur economic activity when people buy wide screen HD TV's,
surround sound equipment and other goods to enjoy the Olympics, and that such
activity could potentially create a much stronger economic stimulus that the
Federal tax rebate because it will be used to pay old debt.
The CNN survey, released on-air Friday, stated that
only 25% of the people plan to use the rebate check for new expenditures and
the rest would be used to pay old debt. This is confirmation of what Boycott
Watch predicted well before the checks were issued.
The problem we see is that because the vast majority of the economic stimulus
package is being used to pay for old economic activity, not new activity which
is needed to spur the economy, it will effectively be more of a political
stunt. Additionally, with the average family injecting $150 into the economy in
the face of rising gasoline prices, this rising food and other costs, all the
benefits are lost.
For about 20 years, Congress and
the President have hurt the U.S. economy by not opening new oil fields in the
US, a topic Boycott Watch also wrote about, and the result has been the U.S.
relying on foreign dictatorships, many of which are not friendly to the U.S.,
for a major segment of our economy.
Regardless of
which energy form you prefer, the U.S. has simply not taken action to satisfy
current demands while conducting research into alternative forms. This is
analogous to a farmer growing food to sell in six months but not doing anything
to ensure he can eat in six weeks - the U.S. government not only did nothing to
ensure short term energy supplies, but by blocking oil companies from opening
new oil fields, the U.S. virtually guaranteed supply would dwindle in the face
of increasing demand, thus created the current economic problems we face.
That combined with the fall of the dollar on the
world market, the cost of goods in the U.S. have gone up tremendously. When
consumers and businesses find themselves in difficult economic times, they cut
back on expenses. The government, on the other hand, raises taxes, thus putting
an even greater burden on consumers, and then the government spends even more
money.
More than anything else, the tax rebate
checks will build consumer confidence, which is important when it comes to
building the economy. To have a real impact however, the government needs to
tighten its belt like the rest of, and pay off their debt like the rest of us
too. One reason gold is high and the dollar is low is because our growing
national debt is causing a loss is confidence in the dollar world wide.
The solution for our economic woes is for the U.S.
to start showing confidence in itself - if we buy back our debt rather than
creating new debt, the stock market equivalent of a company payoff off its
bonds or buying back stock, the U.S. will inherently show the world we believe
in ourselves. We can only do that if the government tightens its own belt thus
getting our national finances in order. We, as a nation, can not expect other
nations to have confidence in us if we do not have confidence in ourselves and
our own economy. |
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