Chris Tomaras / Straight Talk / February 28, 2009

Imagine a family made up of a mom and dad and their 4 teenage children and suddenly dad goes out and buys each of the kids a new car and gives them each an allowance of $200 per week, and then goes out and buys a new home and 2 more new cars for both he and his wife and then goes to Neiman Marcus and buys a new wardrobe for the entire family, a diamond ring for his wife, and then purchases a vacation home in Hawaii and a boat to go along with it. The total bill for all of this amounts to $2.1mm. The wife is a stay at home mom and dad is employed as a salesman making about $45,000 a year.

So what is wrong with this picture and what exactly are you thinking at this point? Obviously your first question is, how can the dad afford 2 homes, 6 cars, all new clothing for the family, a diamond ring for his wife, a new boat, and $800 a week for the kids allowances?

What he has done is leverage himself way beyond what he can afford by borrowing money from several banks and running up enormous credit card debt on seventeen different credit cards. $45K is going to go a long way towards paying back 2.1mm…… sure it is and if he can’t afford to pay back the debt, he is either bankrupt or possibly his family can help pay back the debt or maybe he can print some counterfeit money or rob a bank.

The banks were kind enough to lend him great deal of money based upon whatever he told them and were also supportive by providing him as many credit cards as his heart desired. Sounds far-fetched doesn’t it? True story!
Does this at all sound familiar with anything you have heard or experienced?

It’s just mind boggling to try and figure out what’s truth and what’s not truth when it comes to our government convincing us that they need trillions of dollars to spend as they wish to get us back to where we used to be? Last week I mentioned that since we cannot afford to spend, or we choose not to borrow and spend, the government will do it for us and then send us the bill.

We heard the President try to fire up the nation Tuesday night in his state of the union address, with his oratorical splendor, explaining how he is going to solve the problems of healthcare, education, jobs, housing, cancer, the deficit, energy, social security, Medicare, the woman without a home in Ft. Myers and that’s just to name a few of the things he is going to change. Spare me. And by the way, let’s don’t forget he repeatedly has told us that all these problems were inherited from whom else but George Bush. Right, and my response to that is who cares? As I recall, he campaigned to be the President and at the time he was aware that these problems existed. He’s being paid to do his job and he is going to become enormously wealthy following his presidency with all the book deals, fringe benefits, speaking engagements and so forth. 

If liberal politicians are so concerned about re-distributing wealth, how about taking some of their already accumulated wealth and handing it out to those in need. Why don’t Nancy, Barney and Harry give away 50% of their wealth leading the way in the redistribution process to help pay for the 8000 earmarks which we were told we would see none of. I believe the President’s words during his campaign were that he would unequivocally veto any bill containing earmarks. We have been listening to this political rhetoric forever. And once again, the stock market responded very poorly following the president’s speech and that is because the problems we face are making us constantly question the validity of what we are being told. Americans are sick and tired of being lied to for the political gain and personal ambitions of our elected officials.

And that’s what this is about. Maybe when elected officials lie regarding their campaign promises, it should be considered perjury in order to stop this nonsense.

The truth is that the stock market will continue to drop, housing prices will continue to decline, jobs will continue to be lost, businesses will continue to close and things will continue to deteriorate until we take the words democrat and republican out of our vocabulary and realize that we are facing a life altering crisis. As long as we anticipate further deterioration in other sectors of the economy such as states and local governments, things will not get better. We have got to get back to the basics. What we need to do is figure out how the 13%+ of unemployed (which is the real unemployment rate) and their families are going to survive. Handing them a check is a short term solution to a long term problem. Is that what we want is a bunch of couch potatoes drawing unemployment checks?
Frankly I’m sick and tired of talking to customer service reps in India.

I received an email this week which said the following:

What do Hoover, Truman & Eisenhower Have in Common?

Back during The Great Depression, President Herbert Hoover ordered the deportation of all illegal aliens in order to make jobs available to American citizens that desperately needed work.

Harry Truman deported over two million Illegal's after WWII to create jobs for returning veterans.
And then again in 1954, President Dwight Eisenhower deported 13 million Mexican nationals! The program was called 'Operation Wetback' so that American WWII and Korean veterans had a better chance at jobs. It took 2 Years, but they deported them!

What’s going to happen when the President brings home the troops from Iraq as they start looking for jobs?
So if we want to cut the deficit why don’t we begin by sending illegal aliens back where they came from and get them off of our welfare rolls? That alone would be a huge step towards financial restoration.

We need to restore our values and stop letting the special interest groups dictate the character of the nation. I have said on numerous occasions that I think the election of our first afro-American President and first female speaker of the House of Representatives is a wonderful thing but that does not mean that we must be held hostage to their personal minority agendas spending money as fast and furious as they can before the next election.

I have listened to numerous individuals say that we must give the President an opportunity to implement his ideas in fixing our country’s problems and I totally agree. What I don’t agree with is the President and the Speaker excessively exceeding the speed limit in imposing their tax and spend politics. I frankly could care less whether any of these people are re-elected, or that our Hollywood actors make another multi-million dollar movie, or that a professional athlete signs another multi-million dollar contract  and I am far more concerned how our nation and our children and their children are going to survive the bad judgment of a greedy over-indulgent nation. There is a lot of complaining going on about corporate CEOs making excessive amounts of money yet we hear nothing about Hollywood movie stars or professional athletes making multi millions. Why don’t we re-distribute a few of their fortunes by capping their incomes at $500,000 and use the difference to feed, clothe and house the homeless.
Whether it be the current administration or the past administration, these multi-billion and multi-trillion dollar stimulus packages based on crisis scare tactics are not going to improve consumer confidence and convince people to spend money especially with the results we have seen so far.

We continue to face
1)The increasing loss of jobs
2)The continuing decline of housing prices and the growing number of homes both for sale and in foreclosure
3)The deteriorating financial state of the banks and insurance companies
4) The trickledown effect burdening the other industries, the largest being the auto industry
5)The Global economic meltdown as a result of financial crisis in the US.
6) And next will be the states and local municipalities who will need to be bailed out.

And their solution is to borrow, print and spend trillions of dollars. The bet is that if they pump enough money into the system people will go out and spend, increasing revenue to businesses, creating demand for jobs and the cycle goes on. I totally disagree because they are going to tax the living daylights out of the wealthy who exponentially outspend the majority of the population and are the fuel that has kept the engine running. The re-distribution of wealth is just not going to work. An example of that are the stimulus checks which did nothing. This so-called re-distribution is going to people who will be digging out for a long time to come and a few hundred dollars will do nothing but eventually cost us far more tax dollars.

They just gave the troubled banks multibillions of dollars in hopes that they would lend out the money so that people will borrow and spend.  The banks are deep in debt. When they received the stimulus money they hit the lotto. Who gives anybody a large check in return for their bad behavior other than a dysfunctional enabling parent with no restrictions on how their kids spend the money. I repeatedly have said that I do not think the country will go back to our misgivings of the past because the more suffering we experience the less people will spend. That’s because when people go through significant pain they don’t want to put their hand on that same hot burner again. They just got off the roller coaster realizing that all those toys they bought did not make them happy.

So let’s face it. The biggest challenge for the government today is to convince Americans, who are suffering, to go back to their old ways which got them into trouble to begin with.

And that’s this week’s straight talk.