Reports of the economic recovery say the United States has stabilized and headed up, but if jobs are missing, then there really is no recovery. Personal incomes drive the economy. Loans are a function of income, a person’s cash flow. If the unemployment rate isn’t improving, then the economy isn’t improving. There’s a direct relationship. You can ignore all of the other economic statistics, but pay close attention to this one. Everything else is secondary to this vital data point.
Also, the typical American consumer comprises 2/3 of the U.S. economy. The federal government and economists are anxious for this spending machine to start up again. Their goal is to reassure the citizenry that the economic environment is returning to normal. However, they are not recognizing that the rational decision for people is to actually conserve resources (save money) until the future looks brighter.
To fix the situation, the housing market needs to be fixed. Banks should mark down the values of the home. The federal government should assume ownership of the houses provided that the home payments are still being made. When the housing market recovers in, perhaps 5 years, the homeowners would have the option of buying the property back.
Second, the senior bank executives, who oversaw and caused this turmoil, should be fired and sent to jail. Those executives have no incentive to fix the problem they created. While people continue to lose jobs due to their indiscretions, they are still receiving bonuses. Why? When someone owns up to this crisis, well start to see the banking crisis abate. Until then, we’re stuck with our anemic environment. It will only get better after much-needed changes have been made.
Tags: economy, jobs unemployment, premature, recovery, united states
