>>What's truly disappointing is all the attention on the Fed. The administration and the Fed are tripping over themselves telling anyone that will listen that they're going to make it as easy as possible for businesses to access money when thet isn't the problem. Businesses are sitting on $2 trillion in cash right now. They have the money, but thanks to all the business-hating and class warfare rhetoric from the left and the very well-known stance of this administration to raise taxes, there's no incentive. It's not worth those buisinesses' time to invest where they know they won't make money so things drag on.<<
You're absolutely right. And unfortunately for President Obama the only honest thing for him to do is admit that he really had no idea what he was doing with regards to the economy. Not a real good political move typically. I honestly don't know how anyone couldn't see how artificially injecting "stimulus" not based on any real value could have done anything to help the economy except prolong the reaching of the bottom. Our business is sitting on a small truck-load right now and I can tell you the incentive is to give everyone a pink slip and live off the capital which we would keep in a hole in the ground for the rest of our lives. There is no place safe to invest it were you'll get any sort of return thanks to government maintaining interest rates at almost zero. Then lope off the chunk you'd have to pay in taxes......might as well keep it by your side. It's literally safer there.
(Our business is sitting on a small truck-load right now and I can tell you the incentive is to give everyone a pink slip and live off the capital which we would keep in a hole in the ground for the rest of our lives. )
Sounds like a perfect time to take a 10 day vacation up to Martha's Vineyard! Don't ya think? ;-)
(There is no place safe to invest it were you'll get any sort of return thanks to government maintaining interest rates at almost zero.)
A friend of mine works for AIG and I asked him where I should invest a small chunk of cash. He looked at me and said, "Seriously, do you want to know?", I said "yes." He then told me to dig a hole in my back yard in put the money in there. He said that no place was safe right now.
Scary times.....scary times.
Oh geeze! Thanks for that. I'd rather someone tell me I was paranoid. But seriously--the times are really uncertain. I still do have investments in the market but no new money is going there and nothing I can't afford to lose--no way. I have never been one to be overly risk adverse either. Times are too uncertain.
I do think we're going to see an artificial boost in tax collections for 2010 due to the enormous number of people converting traditional IRAs/401Ks to Roths because this is the first year the Roth is available to certain people. We converted. Our accountant thought we maybe should not have but I'd rather pay the 35% tax NOW than "who knows what" in the future. Just the stress relief in knowing that some source of funds will forever be exempt from taxation is worth it even if my tax bracket does drop in the future. The benefits of a Roth just far outweigh having to pay the taxes on them now. Supposedly tons of other people are doing the exact same thing for the exact same reasons. So maybe some of their "extra funds" are being set aside to pay their upcoming tax bills due to the conversions.
It's going to continue to be interesting no doubt. I absolutely understand why employers would be sitting on their cash with so much uncertainty in the air regarding the regulatory environment, the health care legislation and the tax climate. I don't see it getting better for awhile and artificial meddling will continue to make it take even longer.
We are sitting on our cash.
A 3.05% rate on what??? Mortgages aren't that low are they? That's awesome. Over the years we've paid off almost all our mortgages using a variety of different means. Right now we only have one traditional 30 left and it's at 5.35%. We got rid of the most recent one (it was at 5.875%) by using a 5 year fixed rate equity loan (no closing costs) because they gave it to us at 3.99%. So the rate is lower and the other loan had 25 years left on it though we could have accelerated the payments.
I wouldn't use all my cash to pay off mortgage debt if I were you either so it sounds like you're doing the smart thing. You can always chose to pay more when you can and you're then not forced to if you can't. If I didn't get the tax write off on the two loans I have left I would probably just pay them off as well. It is so nice not to have to worry about making loan payments. I'd much rather have to spend the money on things like replacing someone's air conditioning unit or putting in new windows than to be paying a bank interest. And today I received the 3rd call in the last week for AC service! Two people today asked me stop their rent drafts for the 1st. It's so nice not to have to panic when that happens and to be able to work with people. I guess I just really like my tenants--just like most of my employees. That's why I get defensive when I hear the badmouthing of employers in particular because of the ones that I know do care about their employees. I would say the same for most landlords I know too. If they're not as flexible or forgiving/responsive as I am it's not because they don't want to be but because they can't be. I've been on all sides so I have a lot of empathy all the way around--yes, it's really true.
Yes we are excited we get a 15 year mortgage, lower payments than we have now and know a huge chunk off the time :)
According to the posted article nowhere did President Obama agree that the stimulus was failing - nowhere.
"Taxes are the price we pay for a civilized society."
Justice Oliver Wendell Holmes
You answered your own question:
In my wildest dreams I wouldn't imagine that "we" would agree on anything I am happy to say.
However, I see the effects of a too small stimulus petering out.
"However, I see the effects of a too small stimulus petering out.