Comments on: There’s No Simple Answer http://www.drinkingisbelieving.com/2008/01/07/theres-no-simple-answer/ The party doesn\'t have to end! Fri, 29 Aug 2008 00:59:48 +0000 http://wordpress.org/?v=2.2.3 By: John The Greek http://www.drinkingisbelieving.com/2008/01/07/theres-no-simple-answer/#comment-69 John The Greek Tue, 08 Jan 2008 19:06:29 +0000 http://www.drinkingisbelieving.com/2008/01/07/theres-no-simple-answer/#comment-69 Too little, too late. Thats the story with the Fed. This morning, NPR announced speculation that rates may be cut 25 basis points as early as next week. Does this mean we should take advantage of low mortgage rates? Borrow some more to fix up the house? Take a vacation? It seems that by lowering rates, the public has more of an incentive to borrow more. Isn't that what got us into this credit mess in the first place? It will alleviate some pressure in the short-term, but what will happen 10 years from now? College students will benefit greatly. For me, timing was off. My brother's interest rates were about 3%-3.5% lower than my rates on student loans. This was only after a 3 year gap. Now, a few years since graduation, rates are back down. Does anyone remember a few months ago when the Bush administration triumphantly announced low unemployment and great job growth, or am I just dreaming? Most of these jobs were in the service sector, paying minimum wage or close to it. It sounds great on paper, but has little effect on the economy as a whole. This illusion has faded and the real trouble ( of stagnant job growth) has come to light. So what next? Is is good to keep importing cheap goods & exporting jobs to India top keep prices lower? No, wait, the CPI has been steadily increasing. So how much would it go up if everything is produced at home? And what if more jobs were created here rather than Bangalore? What we need is a social reform. Restoration of values and methodology needed to change consumer spending and living habits. We are a country of consumers, living in excess(generally speaking, of course). Its the American way. That is the problem. Too little, too late. Thats the story with the Fed. This morning, NPR announced speculation that rates may be cut 25 basis points as early as next week. Does this mean we should take advantage of low mortgage rates? Borrow some more to fix up the house? Take a vacation? It seems that by lowering rates, the public has more of an incentive to borrow more. Isn’t that what got us into this credit mess in the first place? It will alleviate some pressure in the short-term, but what will happen 10 years from now?

College students will benefit greatly. For me, timing was off. My brother’s interest rates were about 3%-3.5% lower than my rates on student loans. This was only after a 3 year gap. Now, a few years since graduation, rates are back down.

Does anyone remember a few months ago when the Bush administration triumphantly announced low unemployment and great job growth, or am I just dreaming? Most of these jobs were in the service sector, paying minimum wage or close to it. It sounds great on paper, but has little effect on the economy as a whole. This illusion has faded and the real trouble ( of stagnant job growth) has come to light. So what next? Is is good to keep importing cheap goods & exporting jobs to India top keep prices lower? No, wait, the CPI has been steadily increasing. So how much would it go up if everything is produced at home? And what if more jobs were created here rather than Bangalore?

What we need is a social reform. Restoration of values and methodology needed to change consumer spending and living habits. We are a country of consumers, living in excess(generally speaking, of course). Its the American way. That is the problem.

]]>