The last time I wrote for Springfield Business Journal, I talked about the change we need. My column focused on the major crises we face: a severe trade deficit and our $10 billion and growing federal deficit. With the imminent cost of the American Recovery and Reinvestment Act, aka the stimulus, I can't help but wonder how it is that no one saw this coming.
Undoubtedly at this point, developed nations of the world understand the full impact of America's consumption, or lack of it, and the rippling effects through most economies. As we are all hopeful the stimulus will live up to its name, here are the category highlights of what it's hoping to stimulate and the costs for each:
• tax relief, $288 billion;
• state and local fiscal relief, $144 billion;
• infrastructure and science, $111 billion;
• protecting the vulnerable, $81 billion;
• health care, $59 billion;
• education and training, $53 billion;
• energy, $43 billion; and
• other, $8B
So there we have it: $787 billion ready to go to work - hopefully. As you break this down among the 300 million American citizens, that's fiscal relief in one form or another of about $2,623 per person. As I talk with individuals about their opinions on first the Treasury's Troubled Asset Relief Program and now the stimulus, perspectives are varied as to their intent and effectiveness. But the one string of consensus is that we all want stability.
Let's quit worrying about inflation for a moment and shift our focus to deflation.
For the pundits who say inflation is a major concern, I point to Japan during the last decade. It actually appears that inflation may be our friend, to a degree. As an example, if property values were to increase, this would help shore up the books of many banks. I know when many people hear "inflation," they think $4 a gallon gas. The fact is that those really high prices were largely because of speculation, not inflation.
Still, I am cognizant to this being economics as well. It seems when we boil it down, we all simply want answers. But are there any? How many times can we tell the story in the hopes of uncovering yet another nugget? Even nonfinancial programming has a budgetary slant these days: Rachael Ray is cooking dinner on $2.
We all realize that there are real economic issues - in fact, unprecedented issues, in certain respects. But if we keep hearing the sky is falling or already did fall, we will be perpetually depressed. Fact is, as a nation, we've seen hard times before and somehow weathered the storm and got through it. I'm sure we will this time, too - hopefully, sooner than later.
Next time, I think I'll write something about gardening; that way I know there will be some growth.
Skip Motsenbocker is chief marketing officer of SignalPoint Asset Management in Springfield. He can be reached at smotsenbocker@signalpointinvest.com.
