The planned economic stimulus package looks good on paper and has all the right intentions. However some of the things in the package seem to have forgotten one crucial thing, and that is the present psychological state of mind of the people.
At the moment nearly everyone is in survival mode and not spending any money. Any money offered to them is quickly squirreled away because the light at the end of the tunnel is not yet in sight. In turn that money will only be spent on absolute necessities like food and clothing. That new flat screen TV at the local appliance store will remain that new flat screen TV at the local appliance store.
Lets face facts, the negative messages seen on the evening news every evening are about 20:1 to the positive messages. The positive feel good messages are not about the economy, but are about other things like an accomplishment or an interesting event like a women having 8 babies. Talk about an event for a labor day story, that would most certainly qualify, unfortunately it is the wrong type of labor for what is needed.
There is only one catalyst that will work to get things started. It is the first in a chain of events, and that is the United States government must belly up to the counter and place an order. That will create work, and then jobs. Once there are jobs being made, the wallets will open and that flat screen TV may actually find it’s way to it’s new home.
The other parts of the stimulus package are more of a life line and not stimulus. That part is to hold on to the American dream before the bank comes and places a foreclosure notice to the front door.
The quickest way to get things moving is for the United States government to fund companies allowing them to tool up for the major infrastructure rebuild. Also where there is no company in the middle of nowhere, the government should create one and let it be purchased by it’s employees once it gets going. That will spread things out where they are needed. There is plenty of unemployed talent that will be more than willing to take the reins of that new government startup company and move into a business of their own.
This is the only way to get past that psychological barrier. It becomes the flame that lights the fuse of recovery.