Wednesday, January 14, 2009

Which Bailout..

The national deficit is the largest it has ever been. According to the U.S. National Debt Clock the deficit at the time this article is being written is $10,635,772,096,222.74. Yes, that is Trillion, not Billion, and not Milli on.

We have all seen the Wall Street bailout splashed all over the news. After receiving funds from the bailout, AIG was busted spending hundreds of thousands on a luxury retreat. Later, they were given even more money from the bailout fund.

The carmakers flew in to meet with Congress in big private, luxury jets. I wonder if they have ever heard of eBay. Sell those big tankers that guzzle up thousands of dollars in fuel alone and bail yourself out. The carmakers were eventually awarded some bailout money and just weeks later GM's financial counterpart GMAC would receive a bailout as well. Along with another few million for GM. But, heck, we are only in the trillions; we can afford it.

We all know the controversy over the rights and wrongs of these bailouts and loans. What about the grants, the loans, and the bailouts on the local level? The retailers and entities in Pennsylvania that California may have never heard of. The chain stores throughout one coast, which the other coast would never see the logo for.

Here in Schuylkill County, Pennsylvania we have seen our fair share of retailers and businesses sprout up and then disappear. Just some of the previous retailers we housed were Ames, Hills, Acme, A&P, and Kings. We watched Kmart file for bankruptcy numerous times, each time changing their name and continuing to do business. We have had empty spaces in our malls for years. Last year Steve & Barry's occupied one of those spaces, just before Christmas last year they announced they are closing their doors.

Recently Boscov's announced it was closing the store they hold here in Schuylkill County. I don't really care. I haven't shopped there in years. I can't afford it. Now the county is joining five other counties in an attempt to funnel federal funds to save Boscov's.
The entity claims to need $35 million, yes I said million, to stay afloat in the area. Going along with the carmaker bailout justifications, the officials are saying it is more important to save the 155 jobs that would disappear if Boscov's closes its doors.

Now, I am not that cold hearted, I do feel for those that may lose their jobs. But we need to be realistic here. Being more than conservative for the area, we will assume that the employees of the store located here in Schuylkill County make $10 an hour, and work 40 hours per week, all year long. That is an extreme exaggeration but you will get the point in a minute.

In one year's time, the total payout for the employees, before taxes and deductions, would be $3,224,000. Take that total and times it by five for the next five years wages for the employees and we get $16,120,000. That number is LESS THANK HALF of the total bailout funds that are being sought. We also need to keep in mind that most of the employees would not work 40 hours a week as most of them would be part time.

Even taking the figure and multiplying it by the number of counties seeking to bailout Wal-Mart would not meet the proposed $35 million in 2 years. It is just ridiculous.

It would be cheaper for the government to simply create positions for the people to continue with some kind of employment, with equal pay and equal hours, than to reward yet one more company for their wrongdoings, poor business management, and poor money management.

When will it end? Seriously. I lost my job last year already, took a part time job to help out, but no one bailed me out.

Boscov's has already filed for bankruptcy protection last year, and a report on television estimated the owner's assets at $85 million. What? Oh you poor bugger, you only have $85 million, here let me give you $35 million more to make sure you can stay afloat.

I understand times are hard. Just as my cable company, they know I am broke, too.

The point here is this. Only people in Pennsylvania will hear about this bailout proposal in an effort to save Boscov's. What is going on in your town?

Schuylkill County Pennsylvania has been said to be a 'poor county'. Anyone watch that 'Secret Millionaire' show? It featured this county, people from Shenandoah if I recall correctly.

I have stated in previous articles that to earn a decent wage around here, we would have to travel at least an hour, and that means travel out of the county just for work.
Where was the bailout for that little mom and pop gas station in town when the owner fell ill and had to choose between his health and operating expenses? Where was his bailout? Where is the bailout for the hundreds of thousands of U.S. citizens without healthcare who are suffering from deadly conditions and diseases such as cancer?

Where does it end? Who does it end with? Right here, right now, in this county of Pennsylvania, the bottom line is that the people who reside here cannot afford to shop at retailers such as Boscov's. A $20 shirt at Wal-Mart would be $35 or more at Boscov's.

Then, we get ridiculed for shopping at Wal-Mart, because we are not supporting our local businesses. Well what are we supposed to do? Wal-Mart is probably the only chain, non locally owned, store that I shop at and the bottom line is I can't afford the prices at the alternatives. And let me tell you, there aren't many alternatives.

While the jobs of the 155 people are important, Boscov's is not. We cannot afford to keep allowing the government to just throw money around that isn't there, and yes, it will be at our expense. Maybe not today, maybe not tomorrow, but it will be.

What are they going to do for the people? We have yet to know what President Elect Obama will do with his economic stimulus plan, at least not as far as the people go. I have heard talk of cutting income taxes in order to make the working person's paycheck bigger each week.

While that is a great plan, thank you, what is that going to do NOW? That extra $10, $20 if I am lucky, in my paycheck each week is not going to stimulate me to go shopping. Don't get me wrong, I won't turn it down. But even at $20 a week that is only $1040 for the entire year.

Okay it sounds better now that it is down on here and I am reading it, but I think to stimulate the economy we need that money now. $20 a week will help out with gas money, but it is not going to do anything else for most working people around here.

$1000 will, even $500 will. I could pay off two credits cards with $500 and still have money to spare. In turn, two banks receive their money, and my payments per month decrease.

If they want to give Boscov's $35 million they should disburse it in gift cards to the people, killing two birds with one stone so to speak. The people can buy clothing and other necessities with the gift cards, and the retailer is saved. Instead, they will just give it right to the retailers, the people who messed everything up for themselves in the first place.

So where does America stand right now

I find myself in a situation that many of you may be facing yourself. I'm a college student working hard to make ends meet. But with the changing economy I continually worry about what may become of my fellow classmates and I after we graduate and have to get our lives rolling. Luckily I feel that my career path with allow me to get by if the economy stays on the course it is on now. But what of other graduates that find out that what they had a passion for and spent a great deal of time and money learning will not allow them to pay their bills.

What I see around me, at least in the low-level hourly jobs most of my friends have, is people getting the same amount of pay, minimal if any raises, and cut hours. I may not be an economist but I think this brings our economy down further. When the country's citizens have more expensive bills to pay, but find themselves with barely enough to get by, they will not be able to recycle more money back into the economy. To stimulate the economy, large corporations do not need billions of dollars, this money needs to be dispersed to U.S. citizens. And this should not be done by income but merely by citzenship. A figure I found as of today placed the total U.S. bailouts at $2.56 trillion or almost $25,000 per houshold.

Perhaps this money should not be sent away to greedy fatcats at the head of these corporations and instead given to the struggling Americans hoping to be able to put food on their table this week. With the money these familes can turn around and spend it, which in essence is giving the money to these corporations but in a way that eliminates the greed of the company. This sort of reminds me a bit of Darwinism, only the best corporation survives and in this case the ones America actually needs would certainly do that. Life's little pleasures have certainly made the United States a wonderful place to live, but they have also turned us into a society centered around greed and elitism.

So where does America stand right now? No one has money except for the large corporations who are merely spending it on themselves. So no one can buy anything leaving the economy in a standstill. And the problem fails to fix itself and may even be getting worse. In a rather long and drawn out way I'm trying to approach my reproach for moving forward with my life and living away from home. It's not a worry about whether I could manage physically and emotionally, but whether I know I could be financially stable. With the current economic downturn I worry that being able to pay the bills and still have a little pocket change now, may leave me in the hole and force me to come crawling back to my mother asking for money.

What if gas decides to ricochet back to over $4 a gallon and everything else decides to rise with it again even though most items have not returned to their original prices yet. Yes I feel I have a decent paying job for a college student and work a second job on top of that, but I still barely make it.

I know there are other like me out there that can't help but worry about whether things will get any better with the economy, so please let me know your opinion on the situation.