Being optimistic is good, but being Realistic is required to fix the current situation.
First of all, are the losses shown by the financial institutions - REAL, or is it their projected value of their assets.This will be blogged later.
Pumping the money in to the system with the current plan is like throwing the money into the pothole.
The first part of the bail out did not improve the situation, the environment got worse and would have been the same even without that stimulus package. I am afraid that the current stimulus package also falls in the same category.
The failure is because the stimulus was feeding the white elephant instead of feeding the common man. It was giving the capital to the financial institutions that never had so much asset to lose it in the first place.
The financial institutions got considerable funds but that has not improved the lending practices to common man or for business. So the money is not reaching the common man, it is getting locked up in banks shoring up their capital.
This situation leads to layoffs, which leads to spending less and then the fateful bankcruptcy for businesses.
The banks have to lend with confidence, the businesses have to borrow and have plans and confidence for expansion rather than trying to play safe. This will create more jobs, put money in the hands of the people which will be converted as profits again for businesses and banks. People should have jobs to spend more, take loans and buy homes and to make the world normal.
This may not be as easy as it sounds, investing in infrastructure will improve the facilities and create jobs but only for certain sectors and income groups which is not enough to jump start the economy.
Securing the loans given to people with good credit, who have atleast 60 % chance of repaying the loan will help, rather than backing up bad mortgages. Greed is a very lineant term for bad practices and the right term is criminal activity. It is not fair to put a person behind bars for financial fraud and give money to financial institutions for commiting bigger financial fraud and call it business practice.
It's about time for America to stop concentrating on their linguistic skills and start improving on real business skills and become more productive. We can achieve anything, we did it before may seem encouraging but doing it right with the right people is important and if done right, the recession would not have been in the life cycle.
The renovations on roads and bridges that are in bad shape have to be done, connectivity has to be improved in lacking places, but some of the items that have to get importance are
1. Public Transportation
2. Affordable Medical treatment
3. communication means have to be improved
4. Auto industry has to invest in making better quality cars
5. Green technology for buildings
6. Banks have to lend responsibly
7. Medical Research
8. Improved funding and opening / renovating the educational system
9. Affordable insurance (Health / Car / Home)
10. Promote small businesses
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