Is Cash for Clunkers Stimulating our Economy? Or Bottlenecking Retail?

I live in Florida, where we just survived our bout with Obama's Transfer of wealth program called "Cash for Clunkers II, the Appliance Sequel". What a bust! If anything it hobbled the retailers. Working in the appliance retail industry, myself, I saw firsthand, how the Cash for clunker program suppressed sales in the days leading up the event people weren't going to buy if they could get a better deal later on, unless they had to); Then created a dam bursting effect during the two days that funding lasted. This was followed by a lull in purchases, afterwards due to out of stock situations at the Vendor level. At my store we saw an 18.5% loss in business up to the day prior the onset of "Cash for Clunkers", add in the next two days and we ended up with a 1% loss in sales over the previous year. You might say "well it was an increase so it must have worked!" This is what Democrats live for, the numbers do not lie they say, but, they do mislead. For example; In November of 2009 we ran a 20% increase in sales over the previous year (even with 2009 being a recession year) in December (the month the Cash for Clunkers program leaked out) we had an 20% loss in sales, In January we had a 16% loss of sales (as more people found out), February followed with a 25% loss, March showed a 21% loss, and the first part of April (the 1st through 15th the days prior to the Cash for Clunkers event) showed an 8% loss in sales. Now when you figure in the time frame from 12/01/2009 till 05/01/2010 and bounce it against the same time period 1 year ago you will see a 1% loss in sales. NO GROWTH! The Stimulus was a bust, at least in our store (makes you wonder how those numbers work throughout the state and the states which have already had their events, also what will be the effect in those states with upcoming events?). and when you look at the sales gain in November before the cash for clunkers info was released a 1% sales loss could have actually been as much as a 19% sales gain over the December/April time frame (had the trends continued on). This demonstrates that the government in order to increase sales actually created a bottleneck in the sales process, where the only sales being made were for products that did not qualify (Ranges, dryers, and microwaves; sales of which were also depressed because of people not understanding how the program worked) or for those products the consumer could not do without when their old unit failed (even then I personally sold inexpensive non energy star rated refrigerators that will make due until the event took place and will be relocated to the garage to serve as a beer frigs after their big fancy E-Star frig shows up). Then during the event, consumers found dwindling supplies that ran out or were backordered past the "have to have" date (May 10th which was recently extended to May 31st well after the event was over and that info is too late for consumers to take advantage of). Another matter is who paid for all of this? You and I did! That’s right, even if you didn’t purchase an appliance; you did $17,600,000 (in Florida alone) worth of appliances, since it was your tax dollars that funded the program. Now let me explain something more, this stimulus didn’t really help the lower or middle classes, not truly. There were those who were able to take advantage of the savings, but, for the most part the Upper Middle and Upper class were the major benefactors in this program. Just think the Lower class gets out of paying taxes, or even gets larger tax returns than their withholdings, and the Upper class has more write offs on their taxes, so what this did was transfer wealth from the middle class (who pays more taxes) to those who didn’t need it in the first place. There you have it a program designed to stimulate growth ended up retarding growth, increased the tax deficit, moved a lot of money around (and how much did the administration of that cost?) benefitted the wealthy, and finally make Obama and his Democrat cronies look like they did something good for the country… Talk about your smoke and mirrors!

Bankruptcy

The bitter truth is more Americans consider bankruptcy every day. One of the main culprits, are the banks. The banks and credit card companies have raised interest rates through the roof as our law makers sit idly by watching with little or no concern for the welfare of the nation. What should we do to correct these issues?

1) Congress must pass legislation regulating the maximum interest rate chargeable (usury laws are state laws that specify the maximum legal interest rate at which loans can be made. Congress has opted not to regulate interest rates on purely private transactions, although it arguably has the power to do so under the interstate commerce clause of Article I of the Constitution. Congress has opted to put a federal criminal limit on interest rates by the RICO definitions of "unlawful debt" which make it a federal felony to lend money at an interest rate more than two times the local state usury rate and then try to collect that "unlawful debt". It is a federal offense to use violence or threats to collect usurious interest. Such activity is referred to as loan sharking, although that term is also applied to non-coercive usurious lending, or even to the practice of making consumer loans without a license in jurisdictions that require licenses). I would purpose that an interest rate greater than 12% (1% per month) would be a reasonable rate.

2) There should be 3 levels of Bankruptcy.

A) when the Bankruptcy Judge deems that debts are spiraling out of control, yet the person or persons filing are by their own actions responsible for their condition (i.e. Not as under natural disasters such as earthquakes, floods, or other regional disasters also known as an act of God, or personal disaster such as catastrophic illness, criminal victimization of person or family member or any other situation deemed by the judge as pertaining to the issue of debts). When so deemed all interest rates are suspended and payments made only upon the principle. During the time frame set out by the judge, payments will be constructed to pay off those debts by the end of that said time (i.e. if the debtor owes $12000 in outstanding debts and the judge rules the bankruptcy duration as one year the debtor shall pay to the court $1000 per month; exceptions for payoffs may be imposed by the judge to include mortgages). Level A, bankruptcies may be universally applied to areas affected as National Disaster Areas so designated by the President, without the payoff clause enacted. Thus minimum payments must be made; again all payments during this time would be interest free. Under Level A bankruptcies new debts may be incurred, however, these debts will be exempt from the no interest clause with the exception of new medical debts or recovery loans (loans made to recover from natural disasters). Level A bankruptcies may not be carried on the debtor’s credit report past the payoff date.

B) When the Bankruptcy Judge deems that debts are spiraling out of control, and the person or persons are responsible for their condition. The Judge will review the debts, and be charged with determining whether such debts may be released or restructured. Any debts which are released and having assets will at the discretion of the Judge be dissolved by surrender of said assets to the creditor. The Judge will then assign a recovery fee to be collected by the court and disbursed to creditors. The recovery fee shall be made over a period of time not to exceed 7 years and no less than 1 year, where the debtor shall make payments according to the terms put down by the Judge. Under Level B Bankruptcies, no new debts may be incurred without appeal to the court until said time that the recovery fee is satisfied. Any windfall assets received by the debtor must be reported to the court and assessed by the judge, pending determination of the new conditions which may at the Judge’s discretion give grounds to restructuring or dissolution. Level B bankruptcies may only remain on the debtor’s credit report for no more than 3 years past the recovery fee payoff.

C) When the Judge determines that the situation is beyond control and the condition is his or her responsibility. He may dissolve all debts and order collection of all assets (exemptions of a primary home valued no greater than the National Median price and a single vehicle also valued no greater than the National Median price). At said time, this Bankruptcy shall bear full impact and may remain on the debtor’s credit report for a full 10 years. Any windfall assets received within the 10 year period may be confiscated by the court to be disbursed to creditors...

3) Unlawful or unfair collection of debt shall be addressed by the courts. In these proceedings, should the court find fault with the collection agency or the creditor, said debts may be forgiven, reduced, or restructured (assigned a lower interest rate).