Our self fulfilling prophesy

As we all read the morning news paper or our favorite web feed, the world does indeed look like a dismal place. But the more we read, the more we react. We buy less, stay at home, or if we are bosses, begin to look for who we can lay off.

This cycle presents our self fulfilling prophecy of doom. If our companies continue to layoff, who will stimulate the economy? Airline employees who are laid off, will be much less likely to fly anywhere. Construction workers who are laid off, will not buy supplies to remodel their homes or buy new appliances. Laid off auto workers do not lease new cars. Retail workers who are laid off will not go to the store to shop. Bank employees will not (nor be allowed to) take out new loans. Collectively, the flow of money has stopped. That flow is from the bottom up, from each of us back into the economy. That is what stimulates more purchasing, that stimulates the need for more workers to meet the demand, that stimulates the economy.

Credit card companies struggling to raise capital, raise rates, pushing the monthly payments on card holders existing debt to the breaking point, resulting in yet more defaulted loans, not a continuing stream of payments.

State Governments looking to raise revenues to balance budget deficits built over the years from spending that would make a drunken sailor envious, raise taxes on "Sin" items, and implement fee's that effectively reduce the number of units sold. For example, if you tax soda pop, less people will buy soda pop, sending us back to square one.

Who will step forward to reduce this cycle so basic to any economic theory? Bailouts need to be directed to those who have been laid off, or are struggling to responsibly pay off their individual debts. For if we all wait for the bailout money given to major corporations to stimulate the economy, we will all be standing in soup lines for some time to come.