On Mon, 12 Jan 2009 03:31:44 -0500, "Eisboch"
wrote:


"jps" wrote in message
.. .
On Mon, 12 Jan 2009 02:20:22 -0500, "Eisboch"
wrote:


"Vic Smith" wrote in message
...


I know. But on Jan 21 we can blame it all on Obama according to your
logic.
Seriously, we are in bad shape. Not sure there is a way to recover.
I need to think about this some more.

Do that and get back to me.
I'm going to make a cup of coffee.
Should be enough time for you to work it out.

--Vic


I used the word "logic" to refer to your previous acknowledgement that you
hold the sitting POTUS responsible for whatever the current state of
affairs
is. So does Harry. That's why you were lumped together. Perhaps I
should
have used the word "illogical". :-)

Ok. Back from thinking. Here's the dilemma and my idea.

According to the economic think tank panel on the CNN presentation, the
prime reason for the economic mess we are in is our credit card mentality.
It goes way beyond credit cards however. We want, so we buy with money we
don't have. Sub-prime mortgages follows the same mentality and brought
the
life style problem to a head.

The (almost) unanimous recommendation of the panel was for the country to
return to a post depression mentality and concentrate on savings. People
who lived through the depression learned a lesson and were much more fugal
in their spending habits, putting money away for a rainy day. Somewhere
along the line we shifted away from this mentality, and got into a buy
now,
pay later style of living. Saving for the future changed it's meaning to
401k investment planning, relying on others for a secure future.

But now, here's the current problem in trying to recover from this mess:

The government's solution is to encourage us to spend more now. The
"stimulus" programs are intended to encourage spending. This is 180
degrees
out of phase of what most conservative economic experts recommend and
continues the "I want it now" mentality. It probably won't work because
smart people *are* concerned and will most will put any extra money
received
through give a ways or tax reductions into savings.

Here's my proposal.

Forget about big business bailouts and stimulus checks/tax relief programs
to private individuals.
Establish a federal version of the state small business administration
(SBA) programs and use a fraction of the bailout monies being spent on
bailouts to provide start-up funding or growth funding for small
businesses
nation-wide. This is where 80 percent of the population works. Some of
those who have lost jobs will apply for start-up funding to create new
ones.
Obviously not all new businesses will make it, but those that do will hire
more people, many from the unemployed ranks. Small businesses are better
suited to focus on new technologies, green programs, or service sector
areas
anyway because they don't have the diverse baggage to carry like big
business.

A recovery won't be fast, but it will be based on a solid footing and will
open the door to re-establish manufacturing in the US.

It's a good idea and goes hand-in-hand with fostering an
entreprenurial, green-driven economy.

The problem is, it'd need to go through the banking system which,
apart from dicey mortgage loans, has never been a big fan of playing
venture capitalist. They have a hard time with investment banking,
let alone venture.

The SBA isn't set up to handle the load. It'd be like FEMA trying to
get a handle on New Orleans.

Again, good idea but where the agency to handle the traffic?


Skip the banks. As you must know by running a business a bank is the last
place to
go when you *need* funding.

The money will come from already approved and future "bailout" funds.
Forget about billions and trillions also. If someone made a million dollars
available to me tomorrow, I'd attempt to fire up a new business on Tuesday.

State run SBA *is* too small. I am proposing a temporary federal version of
SBA to get things started, funded by the already approved bailout funding.

Eisboch

Have you seen what the federal gov't did with the program it initiated
to help victims rebuild their homes in NO? Yikes. Bureaucrats are
good at layering bull**** between good intentions and execution.