This is a guest blog submitted by Kash 
The U.S. treasury still doesn’t get it. They just unveiled $800 billion dollars worth of credit for homeowners, students and small businesses. Wasn’t it the credit crisis the reason why we got into this whole mess in the beginning, and now they’re giving out $800 million dollars in more credit? Am I missing out on something here?
The argument that’s being made is, it will help people buy homes, allow students to take out loans and let small business continue to function.
The problem with all that is, people don’t have jobs or losing jobs at a very high rate to be able to afford any goods. For example, small businesses with a new loan won’t make money if people don’t have any money to spend.
So when they have to close shop, they’ll have a huge credit debt. That doesn’t sound like a smart plan to me. I think the government needs to start finding ways to create jobs before handing out more credit.
I would assume most people are holding on to their money because of fear. Fear they might not have a job soon or don’t already have one. I may not understand a whole lot about the financial markets work, but this sounds like a really dumb idea to me.
If the credit crisis was one of the reasons for the economic downturn, why is the government offering another $800 billion in credit? Do you think we’re in for a longer recession because of this? Has the treasury lost its mind?
Comments (8)
I do think they have lost their mind! I think everything is being prolonged because of all of the intervention going on.
But sometimes I think it would be nice to have access to all of the information they have so that everyone can really know what is going on rather than being judgemental all the time!
well, if small business don't get these credits, they will cease to function which will lead to more loss of jobs.
i'm guessing that the treasury is hoping that the credit will allow the economy to slowly start moving again.
and what got us into this mess was issuing credit to those who did not deserve it, not credit itself.
i really hope they do a better job handing out credit this time around.
my concern is that...where do we get all this money from?? just printing more money? wouldn't that just cause inflation??
We need new industries that are profitable and sustainable. How about $800 billion for a new green economy to make ONLY hybrids in the US for the next 5 years. Make them fast, sell them cheap, new jobs, less oil (cut in half), income to pay off the house until the banks get their sh*t back together and be deleveraged. Would that not be better than let bad lending habits and bad spending habits continue?
in terms of college students, this is an immediate response because they planned on cutting back on acceptances this coming year as well as cutting financial aid. feel so sorry for them this year.
i do but then i dont @Trigger821@xanga - ya,your right but wouldnt that help in other ways i dont no so u tell me?
yea, ten years ago it was easy to get criedt kids going to college people just getting it to jack money for what thay wented at the time .
@sj08251984@xanga - well, I am not an expert or anything...but I would think when you have a lot of paper money flowing around out there, price goes up. if people's salary/wage inflate at the rate as consumer price index and they have to pay off debt that has fixed interests then yeah it's good for then, but not for the lenders though...it kind of like a redistribution of wealth if you think about it.
a fine example would the hyperinflation in germany after the WWI...it's scary.