I think if you asked just about anyone this year if we were in a recession they would have responded “yes.” Of course it just can’t officially be a recession until The National Bureau of Economic Research says it is.

Even as we fight to recover, there is a lot of blamestorming* going around in Washington right now as to who was responsible for the economic downturn. The Democrats of course blame the Republicans and vice-versa.*(ok, not a real word, but I like it).

Yesterdays meeting over the proposed bailout turned into a playground brawl. Macaroni was thrown in the lunchroom and some politicians were given swirlies in the restroom. Ok, maybe not to that extent but it is how I picture it in my mind. 

The Democrats say they reached bipartisan agreement, the Republicans are not so sure. Obama and McCain were present and I don’t think anybody on the road missed them. 

Far from solved, some of the issues are far reaching and cross the line to new ground. 

For starters, I am very interested in the draft that would require limits on compensation for the executives participating in the bailout. Yes, you heard right, they are considering limiting excessive “golden parachutes” for the executives that ran the failing companies. I hope it did not take “America’s Best” to figure that one out – unless of course some of the politicians are on payroll. 

Why on earth would you not limit the compensation? How about you limit it to say…ZERO. If the companies go under (without the help of taxpayer money) I suspect their current golden parachutes would fail to open under any circumstance – so why should the taxpayers fund any of it? 

Another point is whether, going forward, bankruptcy judges will be able to modify mortgage terms. Although perhaps seeming good for the consumer on the surface, these newly structured loans go back to pay…well, us. Good luck finding any lender in the future if the courts can go in and change the terms at any time. 

The upside? 

It appears they are not looking at dropping $700 billion all at once. The draft calls for Congress to make $250 billion available with another $100 billion on standby. 

Why the delay? 

Well, I would like to think it is because some people in DC are coming to their senses; that taxpayers bailing out private companies might not be a good thing. In reality I am going to guess the Treasury just can’t print money that quick without jamming up the machine. 

Joe Biden (Obama’s appointed VP) is calling for the higher income individuals to pay more in taxes. Although McCain would have you believe most people will pay more in taxes under Obama, the fact is about 94% of all Americans will actually pay less. But in either case Biden says, “paying taxes is Patriotic.”

An interesting stance. Not since Kennedy’s famous “Ask not what your country can do for you, but what you can do for your country” has anyone went the route of “time to pay the piper.”

Is paying taxes “Patriotic?” You have to first decide the definition of Patriotism. Typically it is the “pride” and “support” of your country. Flying an American Flag – Check. Dedicated people in the Military – Check. Wanting to pay more in taxes – Ummm Houston, we have a problem.

I am not going to suggest paying taxes is “Patriotic,” but I am going to suggest most people in this country want a whole lot more than they are willing to pay for (surprise!) 

Everyone wants health care (and should have it). Everyone wants great roads to drive on. Everyone wants their children to be educated in superior schools by the best teachers. The catch is, when it comes right down to it, most people just don’t want to pay for it.

The new “you owe me” mentality will, for the most part, be the final destroying element of this great country. This is the time to step up to the plate. Not just the wealthy, everyone. The government bailout of both private and public companies is just the beginning – a band-aid over what is amounting to be a very large wound. It is not the symptoms we need to treat, but the underlying mentality behind it. 

If paying more in taxes will (really) get this country back on track – then I am all for it. And, if that is how we define being Patriotic going forward, so be it. 

Although the U.S. economy is showing some signs of stabilization you have to wonder is it real or just another temporary lull in the downward slide? 

What have we done so far? 

• Three-and-a-quarter percentage points worth of Federal Reserve interest rate cuts. 

• A “Stimulus Package” that put some tax dollars in the hands of consumers. 

• The Housing Rescue Initiative 

• The recent bailout of Fannie Mae and Freddie Mac. 

Certainly the government has been creative, but what options do we have left? I suspect not many. So what areas do we need to focus on immediately following the election? Here is my opinion… 

No Rate Cuts: The Fed cannot continue to lower rates unless they truly feel the economy has stabilized. I think some (not all) of the current issues are a result of the Fed lowering rates too quickly in a short time frame. It is possible the Fed could lower rates again but it is also unlikely for two reasons. One, typically they will not just prior to an election and secondly, they are running out of room. 

Real Estate Needs to Stabilize: I think we are just about at the bottom of the Real Estate slide (or at least I really hope we are). There was no way around it. Values went up to quickly and people purchased property based on speculation and greed. Consumers took outrageous loans with the expectation the value would increase. When the music stopped the last one holding the house lost. It appears, for the most part, values have settled back in at an acceptable level. 

Real Tax Incentives: Tax incentives need to be long term, not lump sum. The results of a one-shot windfall, such as the tax checks people received this summer, are short lived. As I have said before I suspect the money disappeared quickly into flat screen televisions and gas tanks – but nothing lasting. Two months later you are in the same position you were before. Lowing taxes over the long haul will provide money each month (in the form of more take-home pay). These smaller amounts will bleed out into the economy and help stabilize the spending. 

Stop the Bleeding: The U.S. Deficit must be addressed. We simply cannot allow our national debt to increase year after year. We need to create trade agreements that encourage the use of our products – not enter in to arrangements where we allow trade freely into our county but the reciprocating county overly taxes our goods. 

I believe we are at a pivotal point – a crossroads if you will. In one direction a continued slide and increased dependence on foreign money. The other road leads to a recovering economy and self-sufficiency for the U.S. 

We only get to pick one road – lets make some good choices.