It's the Economy, Stupid!
 

It's the Economy, Stupid!

Those who are first ot second generation Americans or those whose parents or grandparents survived the Depression have a strong desire to spare their children deprivation. They know what it was like to do with very little. Each generation wants their children to have it better than they had. Past generations had an opportunity to work hard, own a small business and create a better life. That option is less available today with large corporations and conglomerates dominating the retail and service sectors of our society. The small businesses simply cannot compete with the purchasing power of big business and the majority of the next generation will make a living working for one of these industry giants. While handing children material things without having to earn them is a practice to avoid, we all want to see them at least have an opportunity to attain those things that society sees as symbols of success. One of the most basic of these is home ownership.

Whether or not your own financial situation is affected, the current economy under this administration is going to be a stumbling block for the next generation. Under the Bush policies of unbridled spending, our deficit continues to add to our national debt which is growing to unmanageable amounts. We all know what would happen to our personal finances if we continued to wildly spend more money than we had.

How will this affect our children? The basic principle of economics is that price is determined by supply and demand. When there is little money available for loans, the cost of that loan in terms of the interest charged will be higher. Suppose one of your children wanted to buy a home and borrow $100,000.00. Suppose also, that because of the supply and demand, interest rates rose to 10%. At the end of 30 years, that home would have cost $315,927. The interest, or the price paid for that loan would have been $215,927. That's more than twice the amount borrowed. On the other hand, that same loan at 5% would cost only $93,256 bringing the price of that same home to $193,256.

Which do you want for your children? This present George Bush has placed us in the same situation that his father placed us, when after his defeat for re-election, the American people let him know, "It's the Economy, Stupid!"

10-29-03