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Thursday, March 12, 2009

No Job, No Dough!

By Silvia Uribe

To think about the financial situation of our country is like being in a maze. We know there's a way out somewhere, but we simply can't find it. On one hand we hear statements full of hope for the future - the financial situation will get better, the economy will be reactivated with the stimulus plan, and the trust of investors will be reinstated. No doubt! Everything is cyclical. But, the question at hand is when.

Our president is encouraging the public to have their eye in the future and invest now. It is only logical: buy low-sell high. Good advice. Those who have money will make huge profits. This is a buyer's market. But, how many of us have the resources to take advantage of the current situation?

We hear that the banks will start lending money again. Que Bueno! We also hear that we - those who earn less than $250,000 - will have a couple of thousand dollars a year in tax cuts. These are great measures?

...if we have a job, that is.

How can we get a loan, invest again, or spend money if we don't have a job? How far can a couple of thousand dollars go when we don't have a steady income? Those of us lucky enough to still have a job, have the threat of losing it at any given moment. How can we regain trust when we constantly have the ax to our neck? And those who don't have their job, and don't have chunky savings either, are watching their credit card debt increase up to over 43% of their annual income (percentage debt limit set by most banks). They have little chance of getting an equity line or a small loan.

Unless the government focuses on restoring the job situation in America, while re-organizing the parameters in which industries and banks operate, we won't be able to break the vicious cycle in which we find ourselves. The more jobs we lose - blue or white collar - the less reactivation of the economy we'll have.

I assume and trust that the decisions made by our government are what our macro-economy needs to eventually jump back. In all truth, I have to confess, that amounts that exceeding six zeros after the comma are way over my head. This must be the reason why I have so many unanswered questions!

For example, I don't know what's proportionate to what anymore. Is the $44 billion request by GM not enough to get it out of trouble? Really? So, if we were to buy it, what would be its price? To me, it's as if we aren't just "injecting" money, but buying the company and giving some profit to the stakeholders ? but still not owning it. Whether we are for government acquisition of private enterprises or not, it certainly doesn't feel like a good investment to me, and apparently, Wall Street feels the same way.

What's concerning is that we have not hit bottom yet. In my column, "Road to Nowhere" published on Edhat on September 25, 2008, I mentioned some things that may happen to us if we do not implement preventive measures such as a steep devaluation, super-high interest rates, inflation, and de-capitalization of the country. Our continuously growing unemployment rate could only make these things worse and more immediate.

President Obama has been criticized lately for doing too many things at one time. Maybe his critics can indefinitely wait for things to get better. However, most of us don't have that luxury. My only complaint is that while the will to help both "Main Street" and our macro-economy is there, these efforts aren't enough on the Main Street side.

I'd like to see our government focusing more people. Maybe "injecting" money to local governments to prevent more layoffs, or giving fiscal incentives to those who create new jobs, or encouraging the creation of small and micro businesses through small loans from the Small Business Administration (SBA).

Practical, dual measures for our macro and micro economy should be put in place with the same emphasis, and at the same time. If we don't have our main needs (food and shelter) met, how can we be expected to contribute to the reactivation of our economy?

Silvia Uribe is a freelance writer with a Latino perspective.

Cross-posted at

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