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A Dummy’s Guide to the Recession (AND YES IT IS A RECESSION DAMMIT!!)



November 17, 2008 – Comments (1)

Part 1

The Bureaucratic Government Dummy’s Role


Step 1: Issue a $500 billion bailout for the banks.

Use $200 billion to buy up positions in various banks and use the rest to buy up their bad mortgages, on the condition that they must lend a specific amount of money every month in order to help rev up the economy. If the government doesn’t step in now, there is a great chance that the financial situation will deteriorate, which will finally get to a point when the government has to step in. We don’t want another Iceland, now do we?  


Step 2: Issue a $100 billion bailout for the carmakers.

GM is poised to run out of money by early January and Ford a little bit later. If they die, there would be a devastating result in the stock market, as GM and Ford were once the icons and symbols of the American economy. This will most likely result in a huge downturn for the market, and increased panic and volatility, which will bring the US deeper into a recession. It will also result in the firings of thousands of people and a higher rate of unemployment, which will lead to eroding customer confidence and spending which is the base for the American economy. Already battered retailers such as Macy’s and JCPenney’s will get hit even harder, as well as restaurants, oil companies, etc.


Step 3: Put aside a $50 billion pool that the Fed can tap at any time

The $50 billion will be used somewhat like a backup plan if something unexpected happens, such as a big homebuilder failing. This pool should only be tapped by the Fed in the utmost dire circumstances.


Step 4: Launch a nationwide advertisement campaign to encourage spending

Hire those people who launched the “Got Milk?” campaign and some from Apple’s advertisement division to help instill consumer confidence. These ads should be targeted specifically for teenagers as they are the most likely consumers to go on a shopping spree or a buying binge.


Step 5: Initiate the Peter Pan Stimulus Plan

 The plan is simple-to give money to kids.          

            There already was an economic stimulus package bundled up by the Bush administration, which the administration hoped would be used to spend money and help revive the economy. However, a majority of the money was directed at adults, who saved it and used it to pay off loans and mortgages and so on. To put it simply, chances are they didn't spend it on a shopping binge at Macy's. However, if we give the money to the kids, chances are they would go on a shopping binge. Seriously, how many kids do you know that are in debt or have a house or own a car or even save? Not many, I'm sure. Once they go on a shopping binge, every kind of store would start getting more and more money, which builds up consumer confidence, resulting in better earnings reports, which results in increasing stock prices, which can help restore investor confidence. Then, when the teens realize how much cheaper the things were, then, for example, a year ago, they would start snatching up the bargains. This could result in more and more fashions, which could then lead to more and more kids buying stuff so they could become "cool." Parents would be happy because they wouldn't have to spend so much money on stuff and business owners, from fast food restaurants to department stores and gas companies to video game corporations, would also be happy because more and more people are buying their stuff.

1 Comments – Post Your Own

#1) On November 17, 2008 at 2:14 AM, lquadland10 (< 20) wrote:

Na,,,,,,,, That was 2 years ago it is now a depression.

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