Meeting the People's Needs

The other night, lounging around the house, watching another story about mortgage crisis on the news, it seems like everything in United States is in crisis now. Contemplating the issue it occurs to me that Reganomics came about during a time of inflation. Now we are in a recession. Increasing a business's ability to grow and meet demand made sense at the time; however, today we are in a recession. The rules are completely different.

Recession and inflation are two opposing forces. Recession is categorized as having more suppliers than demand. Inflation is related to shortage. Suppliers are not able to meet demand. Back in the 80s promoting businesses made sense. This created more businesses to supply demand. Now many major markets matured and satisfied the needs of most people; therefore, growth is limited.

Comprehending the future of the United States, automotive and insurance companies reached the end-of-the-line. Letting inefficient companies go bankrupt would be a satisfactory solution. Let some of suppliers would be let go, so the remaining companies can make solid profits, hire more people and become familiar their industry.

The older generation counts on these industries, not recognizing the future of the United States. Automobiles peaked, everyone owns a car and many people from my generation are trying to make automobiles expendable. To help save the environment people commute to work on mountain bikes. Cars are expensive to own and maintain. Unless there is a clear reason to own multiple cars, many families get by with only one or two cars. The average person with a full-time job needs a car; however, since it takes a long time to add miles they keep their car a several years. Only a few people have careers requiring travel to surrounding states. They buy cars all the time and even then some prefer a pre-owned vehicle and drive it into the ground for five years while saving money to buy their next car.

Insurance followed a different pattern in over-supplying the market. Everyone was planning on the Baby Boomer's retiring; therefore, everyone went into insurance. Companies hired anyone and network marketing made referrals into a paid job. As the market saturated a few companies secured a place in the industry. Many companies did not recognize the competition, adjust to the market or attract new customers.

Now that the market has matured it is time to let some companies go bankrupt. One or two hundred customers barely keep them in business, since insurance relies on dispersing risk. Unfortunately, some of the older companies were not prepared. Government insurance will cover losses and the owners will maintain their lifestyle. However, many of employees had their wages garnished in order to pay for retirement and people who invested in mutual funds lost their savings. Seven hundred billion dollars would help these people right now. It could sustain them in their lifestyles while looking for a new method of handling retirement.

At one time bankruptcy was considered awful; however, now the government pays for everything. They cover over 50% of a business or home mortgage if the loan defaults. It is almost nice to declare bankruptcy, so banks can collect on losses. I knew a person who ran three different companies and they declared bankruptcy three times. You would think someone would stop them or slow them down. Government took care of everything. Prohibiting a person's ability to gain credit would reduce bankruptcies. Perhaps citizens must remain responsible for theirs debts at least seven years before declaring bankruptcy. Banks proceed in collecting from debtors, instead of, taxpayers. Of course taxpayers support these funds, because we all want a second chance. After the seven year time frame the debts would be permanently charged off in a way that prohibits future collection procedures, yet allowing an opportunity to make payment.

Everyone should be cautious when opening a business. They should develop a business plan and study the market, because there are real consequences. The Internet is radically changing the business market. Businesses are looking to save money related to buildings by hiring work-at-home personnel, or expanding business through network marketing. Only a handful of companies are being suppressed during the recession. Cell phone companies can look forward to several more years of growth before maturing. Everyone wants cell phones. They are a growing part of business and survival. Computers are slowly maturing; however, they still have growth potential.

Government needs to start saying, "No," to socialized spending and start placing restrictions on banks relying on federal insurance. Too much money is going to businesses. This continues the rising problem. It is time to recognize that the economy has changed and start listening to people. People are not saying, "We want government to pay for mistakes, or suffer in a declining economy." People are saying, "When something goes wrong effective and efficient assistance is wonderful."

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