The federal government does a great deal more for the average American citizen than simply collect taxes and restrict their constitutional freedoms. In many instances the government has also proven to provide many forms of social work and financial service for the citizens that require aid. Many people are aware of the fact that almost anyone can receive aid for acquisition of money to help them go to college or get a trade-skill certification. What most people do not know is that the government aid programs are actually far more extensive than simply helping individuals go to college. Grant programs are available that can help get people out of debt.
Many of these stimulus packages began creativeflicks appearing due to the economic crises that occurred in the final years of the Bush administration. This crises continued well into the Obama regime. During this time, however, many aid packages were developed. While the ‘bailouts’ that were cited on opportunistic media stations and in newspapers gathered most people’s attention there were many other plans in place to help the common man or woman in America. These funding types were, and to some extent still are, overlooked and unknown to most people.
There has been some talk by rumor mongers and financial predators hawking their grant finding books on television. This talk mostly focuses on the evils of the federal government and tries to convince people that their leadership wants to keep all of the grant money to themselves. They cite the fact that few people know of these programs as evidence. However, the truth is that these programs are not covered up by evil money hungry politicians. The government is a massive bureaucracy. 789bet Any bureaucracy larger than the most intimate of local level agencies will become highly inefficient. This is the case with government grants. They aren’t hidden on purpose. The government is simply inefficient at getting aid to the people who need it.
There are many programs available. Some of the newer ones are designed to get people out of credit card debt. These plans either freeze variable interest rates at a lower amount, sometimes around six percent, or they act in the manner of a direct monetary grant. These debt relief grants are usually for people with ten thousand dollars worth of credit card debt or more. There are also new programs for first time home owners, and many people knew of the original ‘cash for clunkers’ program that ran for a while and is considered for occasional renewal every so often.
This short overview of our current economic and real estate conditions is what I think, presented in a simplistic, magaziano broad-brush narrative of the affairs that lead us to where we are today with some realistic long term ideas to prosperity and solid economic recovery and growth.
First, we know every industry is like the tide each with it’s own ebbs and flows. To be certain the real estate market is experiencing these changes, so in many respects this is very normal. The real estate industries ebb and flow is generally 10 to 12 years. The last time we hit bottom was at or around 1995-1997. What’s not normal is how dramatic this occurrence really is. The ripple effect is clearly worldwide, which illustrates this is not just a real estate problem but a financial one also. We did have a disastrous real estate market in the mid to late 1970’s, which, resembles much of what we’re going through today but it was more of a national problem than worldwide.
The current state of our economy is a direct result of several factors that have been building for many years. The main contributing factor in my estimation, which is usually the case, is government policies. What government does and or does not do effects all us in profound ways, such as raising taxes, creating regulations, and spending policies to name a few, and of course politics; in short this is social engineering. The courses of action our politicians adopt have a direct effect on how we live our lives, how we invest money and what we invest in. Investors invest in assets that will make them money or provide them the means to do so.
For the past 5 to 6 years, the real estate market had been flooded with new home buyers previously renters, along with many “step-up” home buyers. Financing was very easy to get for most people, many of who perhaps should have never had it so easy. With that, poor spending habits ensued throughout the general population, in other word’s we were acquiring large amounts of debt without the income to match. Many businesses such as the financial institutions also had their fair share of shady dealings. Additionally, Governments at all levels were doing the same thing. They’ve never seen this kind of money come in at such a fast pace and of course with policies put in place years before you get an economic condition, i.e. government spending, regulations, taxes & fees that couldn’t be absorbed anymore by the general population, corporations and the financial institutions. A very serious unstable market had been created.
Finally, if all the previous spending wasn’t enough, the government went on a monumental spending binged over the past 10 months dragging the economy further down. Now you may ask why is this so important? It’s because everything the government does, as I have said, has a profound effect on each and every one of us. Why? Investors and investments! It’s no accident that we have the most dynamic and advanced economy in the world. The United States embraced an open market place long ago where investors, influential people, empire builders and entrepreneurs alike have the freedom to invest their money, products and ideas into our system. No other place in the world can you do this quite the same way.
The problem is over the past 20 or so years corporate regulation and tax burdens are out of control, Influence on public employees to do favors has never been so far-reaching and nearly 50 % of the population doesn’t pay income taxes. The country has been changing in ways, which leads the Movers & Shakers to rethinking their investment strategies. Earning money has some how now become a bad thing politically. Be clear making money is a good thing and should never be frowned upon. Not withstanding unethical and illegal activities.
The Investor class of people are very astute, and rests assure they are watching everything going on, and until they see clear skies ahead they will either remain on the sideline or invest elsewhere. Several things in the near term need to happen before we can see clear skies.
- The financial markets need to finish cleaning-up their books with their bad debts, which will lead to improved lending.
- Taxes in all forms including “pass-through taxes” such as the new Cap & Trade energy tax cannot go up and or be implemented as they are scheduled too. Congress must keep this from happening.
- Congress must repeal the planned stimulus-spending bill, which will go into high gear just after the 2010 elections.
- Commercial real estate, nationwide, is headed for huge loan defaults unless something allows the property owners a way to refinance without adding cash equity into the asset we will see more than 700 Billion dollars of loan defaults; this will be ugly.
- Interest rates must remain low and balanced with possible inflation and deflation conditions.
Once the above happens and or moves in that direction businesses can once again begin their empire building, which leads to growth, which will spark employment, which will allow mom & pop investments to occur. Remember 80% of jobs are from small businesses. The employment market must be stabilized! Then the residential housing market can go into a full recovery swing that will promote a more stable economy. We believe residential real estate will lead commercial real estate out of this recession. Additionally, Multifamily will lead the way in the commercial market.
Long term, we need to be concerned with public policy and the spending that comes with it. It is my opinion; we should embrace and employ a whole new breed of Entrepreneurship along with a core focus on Research & Development in all of our industries. This type of R&D spending will help ensure future growth of our economy. In order to have a strong real estate marketplace we need a strong economy. In order to have a strong economy we need good public representatives.
The people of this great country need to understand, we will be better served to plan the future many, many years ahead of time should we plan to continue to lead the way for the rest. We have a great economic system and therefore the promotion of such a system should be pursued.