Dear Mr. President and all distinguished leaders,
I am writing in reaction to the President's speech last night. Several of his proposals will directly affect me positively, and I can easily get behind most of the ones that don't directly affect me as well. Who doesn't like money being put into one's pocket?
However, as a lower-middle class family man, I can say that such proposals really won't help much to get me to spend more: which is at the heart of the economic uncertainty right now. Honestly, the economy needs us consumers to spend. Providers have plenty of goods to supply, but there is little demand from us.
Let me tell you why.
1. We're not necessarily holding onto our cash. Sure, some are indeed saving money right and left because of the uncertainty in the economy, but most of us are like pass through banking accounts. It goes in one day and out the next. We are spending our money, but it's not on the extras anymore. We can't afford them.
Why?
2. We're paying through the nose for energy and food. Yeah, I know the FED keeps saying, "Core inflation is healthy." Just once, I'd like to tell those folks to get a grip! Inflation is inflation no matter if it's core inflation or commodity based inflation. It has the same effect on our pocketbooks.
Here's a thought for you officials to consider. When energy prices dropped during the Great Recession and maintained low levels, the economy started recovering. But when they spiked again, everything stalled out. Our expendable incomes dried up once more. Consumer confidence dropped.
Energy prices, directly impacted by the price of a barrel of oil have a major effect on all other consumer goods. They drive up the price of food. They drive up the price of manufacturing. They drive up the price of clothing. When such necessities go up in price, they dry up our ability to spend. We have to cover our electric bills. We have to cover the cost of food. We have to have clothes. Whether you like it or not, most of us drive to work, and we have to pay for the gas. When these prices, driven by high energy prices increase, our ability to keep the economy moving by our spending falters.
And, of course, when our spending falters, businesses hunker down, save their money, and refuse to hire. Unemployment stagnates, and we end up where we are right now. A perpetually spinning hamster wheel that moves nowhere.
Now, I know you Republicans and Democrats hate each other. I know you spend most of your time trying to make each other look bad. I know you vie for power and strive to keep it. Unfortunately, for myself, I have become a great cynic of most things political. The old joke, "How can you tell a politician is lying? His/Her lips are moving." is more of a description now-a-days instead of a joke. I hold out great hope because of my faith, and I really, really try to put the best possible spin on your actions and speak well of you when I get the chance. My faith urges me to do so.
But I find such a thing more and more difficult as I sense the further gap between the ideologies you embrace and the realities of the life I live from day to day.
I think, that if you truly wanted to help me and others like me, you'd try to address the things that really limit our spending down here: energy and food. Reign in speculators. Tax the heck out of their capital gains in these areas and make it prohibitive to drive up the cost of oil and food. Work to get gas prices back in the $2 or less per gallon range, and watch the prices of food fall once again.
Now, I know that both parties have a vested interest in high energy prices. Republicans are great friends with the oil and gas industry, and it would be a shame to have that relationship strained on behalf of the people who elected them. But, hello, make a deal with the devil, and you eventually get burned. Most of us down here know this. And most of us don't like it.
Democrats, you aren't off the hook either. We know you like high energy prices because it helps you push the "green" agenda. Now, I agree completely that renewable resources are great. I love solar and wind power. If I could afford the darn stuff, I'd put it on the house I own immediately. But such energy sources aren't there yet. They are horribly inefficient, and we can't touch our power generation needs by using them alone. This is just the tip of the ice berg. I know you are truly concerned about our dependency on foreign oil and sending U.S. monies to countries that aren't exactly friendly to the U.S. However, consider this, by failing to reign in those who drive up the price of oil, we're actually putting MORE money into the hands of those countries who don't exactly like us. How is this a good situation? Lower the cost and lower the amount we give these countries who purposely denigrate us and would like to see us come to harm.
So, let's look at this again. Work to lower energy costs. That directly lowers the prices of food and other necessities. Consumers have more money to spend. The government does not have to go into debt. A commodity tax puts money into the government's pockets--which it desperately needs. The only one's really hurt are the speculators who aren't exactly being kind to Joe Public. Where is the down side?
I guarantee, folks like myself, with the extra income will begin spending again. We won't feel so pressed and up against the wall.
The economy will get better.
And then you can go back to beating each other up and vying for power.
Just about everyone wins.
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