Fast Cash is No Quick Fix

So, our Federal Government chose to attempt to satisfy Wall Street, but so far it appears to have the same impact as when they threw several billion at the lending banks a few months ago . . . Maybe the oil companies could donate a little to the cause, as they have shown unbelievable profits in the past several quarters. I don't understand how anyone thinks this economic stimulus package is even supposed to work. Wall Street is still wavering, the banks haven't really recovered from the last low interest rates of just a few years ago, and now "they" are talking about $150 billion in tax rebates. Well, this part I do have figured out. First, do you remember how the banks rebuilt themselves when the interest rates were low? New bank buildings went up everywhere and our CDs were paying about 2%. I'm guessing the banks are mortgaged at that great rate they got a few years ago, but that also means, they aren't really solvent. If banks borrowed money, even their depositor's money for a return, that really isn't what good banking is built upon. Good banking invests the depositors funds in other building projects, not a fancier one to use the drive up window to make more deposits. And now, we the tax payers or should I say our grandchildren are going to have this debt on them, just like we boomers have the debt of Social Security and Medicare. President Bush has already stated that he isn't figuring in a change in the budget with this new proposal, so it will simply get added to the deficit. The reduction of the interest rate to satisfy the global market really isn't fair to the middle class Americans that have worked hard for their money and attempted to build a little nest egg. And I just can't help but be cynical considering this is the first year, the Baby Boomers can begin to retire. See how I know my grandchildren and great grandchildren will pay for this mess. I'm a boomer and I'm still paying for the young adults of the Great Depression.
It's easy to see the correlation between the subprime mortgages and the slowed spending. Once the Americans with excessive spending habits, which translates to poor credit ratings, became eligible for mortgages through subprime lenders, two things happened. The instant spending had to stop to make the mortgage payment and there was far less expendable cash in the economy. Our economy truly is based upon the perpetual motion of purchasing instant gratification and unnecessary trinkets. A perpetual motion economy has no standard, therefore; is not founded upon solid investments. Unfortunately, the subprime lenders didn't realize or didn't care that there was a very real reason, these people were coming to them for loans, in the first place. Subprime lenders amounted to little more than real estate pawn brokers. Their clients maintained their same money management skills.
Now, let's address this interesting promise of a tax rebate. First, a rebate, by definition means a sum is paid, then a portion of that sum is returned. A rebate is a refund, usually partial. I checked some interesting facts that Rush Limbaugh has mentioned and posted and I have no reason to argue them, so . . . We've been told for quite some time now, that nearly 50% of Americans don't pay income taxes. On the page I read, it was stated that 96.4% of our nation's taxes are paid by the top 50% wage earners. So that means nearly 50% of Americans are not figured into this rebate plan, to begin with. To break it down even further, I'll use more of Mr. Limbaugh's figures. I don't know if there is a difference between wage earners in this information and those with investment and inheritance, but if so I believe they are all figured into this next bit of information.
I read that 82.9% of income tax is paid by the holders of the top 25% of this nation's wealth.
So, if we do the math, and maintain consistent variables, in just whose hands will be found, the primary portion of the $150 billion?
He that oppresseth the poor to increase his riches, and he that giveth to the rich, shall surely come to want. a Proverb of Holy Scripture