Wednesday, February 25, 2009

Obama's Stimulus for banks

I disagreed with was his idea that freeing up capital for loans to people to buy cars, homes, credit cards and college is the way we reenergize the economy. The reason for our poor economy is that we as a nation are indebted up to our eyeballs.

The Federal Government has nearly $11 Trillion in debt. Families have credit card debt, car loans, mortgages and college loans. We as a country have mortgaged our current life style for years to come. Taking on more debt makes us more susceptible to recessions. We must first pay down our debt, which will increase our credit worthiness. The reason why banks are not loaning money is that they perceive borrowers as risky. The reason is simple; they have too much combined debt. They have maxed out their credit worthiness. Yet President Obama wants banks to loan them more money to get the economy going.

When a family borrows money today it limits its future standard of living. Borrowing today, reduces purchasing power in the future. The only sure way for a secure economy in the future is to take our medicine now and reduce debt and live within our means.

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NBC-33 Debate poll results from 2002