Thursday, September 30, 2010

It’s Time for a New World Order-4

Right the best thing to do this is to have a major review of our priorities in light of our financial situation and also keeping our strategic interest in perspective. We need not spend time on staging Mideast summits every now and then since there is not going to be any solution to the problem. They are not our major concerns. Our biggest one right now is the threat coming from the Pakistan-Afghanistan area and we should be concentrating our resources there. The forces that are sitting in Japan and Germany should be brought back home completely or be reduced by 80 to 90 percent of what they are now and concentrate on forces already in Korea and deploying naval forces in the international waters near Japan.

Since the non state actors (especially the so called Islamic Terrorists) operating in unstable countries of the Middle East should be dealt with strengthening the regimes fighting them and also concentrating on small rapid deployment commando units to go in and fight and get out as soon as the mission is completed. This is the main issue that should be concerning the U.S. right now. At least with this realignment of our priorities we can reduce our defense budget while at the same time make our military highly concentrated in what is the real threat. As for the rhetoric that the Republican Party will take a tough stance on Iran, we need to understand that if we can target the sanctions with highly precise financial tools, it will be more effective than launching an ill conceived attack and opening up a can of worms which will not be financially, militarily and strategically feasible for us and our allies.

It’s Time for a New World Order-3

What are our priorities is highly debatable and will always be with different views of the Republican and Democrats and also of the Military and the Economic teams of the President. But this should be assured that in this day and age where we are accumulating debt and the world is weary of nation to nation wars and the so called non state actors are very active all over the place, we need to make sweeping changes which people are not yet talking about. As I have said in my previous posts we don’t need to keep thousands and thousands of forces in Germany and Japan, since those two countries are mature and economically powerful enough to handle their securities.

Even if we want to keep our forces, it should be in the thousands and not in the tens of thousands now and the host countries should pay for all the expenses since we are should not be paying for it by borrowing money from investors. The Korean peninsula is a case where there should be forces but other than that we should be withdrawing our forces from all the stable countries including Iraq and not Afghanistan and in order to project our power, we should be investing in the navy. Another thing is that we need not treat every region with a prism of national security since we cannot be everywhere because of our financial situation now and also in the future.

It’s Time for a New World Order-2

This does not mean we have to spend more money in order to create a Brand New world order. It means that we can prioritize our strategies so that we don’t stretch ourselves too thin financially and militarily and still fulfill our obligations to our allies. By obligations we mean that with respect to some treaties and other mutual cooperation. Since the end of the cold war and the realign of the terror threats we need to be in a state of quicker responses than the mentality of massing large amount of forces over a period of time. Our responses to the disasters should be quicker, faster, swift and monetarily manageable with help from other richer allies and not rely only on the U.S. taxpayers.

We are still in a state of denial of what we can and cannot do with respect of projecting our power and helping maintaining peace around the world while at the same time accumulating massive amounts of debt which sometimes goes to waste or we lose track of it or give aid to allies who waste it anyway or squander it without helping our cause or our interests (and you know whom I am talking about). I mean to say that how long we are going to waste our precious resources on foreign affairs/adventures when we are already in a deep rut due to this recession. There is only so much we can do as a superpower and we should ask our allies to share the burden of security and also we should realign our priorities.

Wednesday, September 29, 2010

It’s Time for a New World Order

The world has been changing very fast lately and the U.S. has been trying to keep up with the changes but it is falling short. It has not realized yet that nations are not listening to it as much as before. This may have been due to many factors but the main one I believe is the ongoing war in Iraq and Afghanistan and the financial situation we are here in now. Our foreign clout is becoming less and less and we have been unable to exert our influence in affairs that matters most. We have been frivolously trying to waste our energy in places where we should not be doing it in the first place, but due to some influential lobbying and misguided priorities we have been doing it on and on in almost every administration without getting any results.

The first new world order was done during the Elder Bush administration and it did not help that much since there was an increase in the defense budget and the world order did not last that much with terrorists’ attack in 1993 to world trade center and also the chaos that was left from the ashes of the broken Soviet Union. Then the 9/11 terrorists’ attack happened and we went to hyper drive to solve our problems militarily and with recession of 2001 and now this recession has come a need to realign our priorities to engage with the world through a New World Order based on realistic and not idealistic assumptions

Will the TEA PARTY be the savior of America?

There is a new Phenomenon on the horizon in the Political climate of the United States. It is called the rise of the TEA Party within the Republican Party. These Tea Partiers have been called a lot of names like the far right, racists, elitists, white disgruntled etc. But to call all of the names and just dismiss them as a radical fringe of the Republican Party will be a foolish mistake. These people from what I have read are that they are not happy in the way the country is heading for. Be that of the huge national debt or loss of control of their destinies or the deep recession or harboring of suspicion of the Democrat party, they are a party which is very afraid of the change that is going on in the world and would like to change what is happening around them.

I believe that with the deeply unpopular administration and the failure of it to create more jobs and also putting more us into more debt, there is substantial evidence that they will rack up impressive gains in the November 2010 congressional elections. But changing the way things are going on will not be easy for them since the world is changing very fast and with our ability handicapped by the recession and our loss of influence around the world, it will be interesting to see if the TEA Party will really be a savior of America or just another of a short lived phenomenon.

Is retraining the answer to unemployment?

Everybody is talking about retraining in this kind of economy. Since the great recession, jobs are scarce and whatever the jobs are there they are in areas where there is an increasing need for different set of skills. These skills need more retraining for people who have been in their previous jobs for a long time and are either reluctant to invest in a new skills or don’t have the means to do it. Financially I can understand that people have other obligations to fulfill and they may not have the time or money to pursue new skills or they are not sure if they are going to get a job when they have done training since most of the jobs now require experience in addition to theoretical knowledge.

But another thing is that do the people who are in their 50s or more (which are now more discriminated due to their age, etc) really want to switch their careers or if they do would be able to find a job in an increasingly youth oriented and competitive market. I can be wrong but the evidence is coming out that this new training is just hope against hope and as long as there are more jobless than the jobs no amount of retraining will help.

Sunday, September 26, 2010

Bills start with good intentions

All the bills that are initiated in Congress start with good intentions but then they run into competing interests and influences and limitations. Even if the bill is passed intact (which it really does) in the house, then the Senate has a different idea and they pass a different version of the same bill. Once it passes both the houses in separate version, then the bill is sent back to a joint committee of both the houses to hammer out a compromise bill and by the time it becomes a law, the originality of the bills is reduced to shreds.

Take for example the health care bill and the finance reform bill. Even with the best of intentions, the bill creators and supporter ran into a maze of competing interests and powerful lobbyists who want to make sure that the bill reflect as little regulations as possible. For example as I wrote here before, even the finance bill curtailing some bank practices of late fees or the credit card fees, I knew that the banks will find a way to make money in some other way since they are in the business of making money and any thing which has been free or minimal fees will be jacked up with different names and it has started to happen. The same is happening with the health care bill and we will see more premiums being raised and the health care becoming more expensive in the future, no matter what the intent of the legislation is. As the saying goes “there is no such thing as Free Lunch”.

The China then and Now and Japan

Recent news regarding the arrest of a Chinese captain of a trawler off the coast of Japan (which is being contested by China too) has given way to rising tension between the two Asian Giants. After a tense standoff, the Captain was released by the Japanese without being prosecuted. It has touched off protests from Japanese public that it was a humiliated defeat of the Japanese in the face of the Chinese pressure.

It is really hard to imagine if you are Japanese what really happened here. It was just during the World War II that the Japanese forces occupied China and China was in disarray. The Japanese were the uncontested Superpower of Asia and then it was the second largest economy of the world till recently and now the same China which was so
Down and out has now reclaimed the status of the second biggest economy of the world and the Japanese have become so dependent on Chinese Labor and economy that they are willing to back down in the face of its pressure. I don’t really understand what the Japanese were thinking in the first place to arrest the captain and then backing down. It just shows how far ahead China has come and how the Japanese have realized the limits of their power and their political and military decline.

The End of the Road for Blockbuster?

Blockbuster, the nation’s biggest video rental chain store has recently filed for bankruptcy. Although it was a not a surprise since the news were already in circulation for the last few months that the retail chain is in dire financial strain due to its brutal competition with Netflix-the online rental company and Redbox, the $1 a day video rental kiosk placed almost everywhere.

The main thing that let it down was the competition with the Netflix. Since they do not charge late fees and also the rental market is being now eclipsed by streaming videos and they were unable to compete with that. As one of the articles recently mentioned that the future vision that companies need to have to see what is in store for them or what they see themselves in the future was not just there. The main problem was the late fees (which I also acknowledge is really the culprit). If you are going to rent a movie which is already expensive and on top of that if you forget or don’t have the time to return it, then it is better not to rent it in the first place or just buy it outright. And with the booming internet choices and on demand channels, there was no way for block buster with huge overhead to compete efficiently with the other main players. For now it blockbuster has to reduce its huge stores and concentrate on the internet and low rental and no late fees model.

Anything but the Jobs

Okay I can see that we have done a lot to try to get a grip on the job losses. But we are still trying to be a superman to the world by tackling so many issues which the American public doesn’t care about much. We are spending way too much time on the Middle East peace process, in Pakistan and now in Yemen, also trying to contain China in the Far East. But what about the jobs? There is so much uncertainty about the expiring tax cuts and also the coming elections and weak consumer demand that the jobs are not being created.

My purpose here is to highlight the fact, that the jobs of many senators are riding on the coming Congressional elections and they are depend on high the economy does. When our economy is taken care of then we can worry about the world at large. All our efforts should be to put the American public on employment and there is nothing more important than that. As the saying goes “Charity begins at home”.

The Republican New “Pledge”

So on the verge of what can be said the great victory of 2010, the Republican Party has come out with a new you can say it is a manifesto for what they want to do if they are in control of Congress over the next two years, it has been called “Pledge to America”. To them it may be big programs but by the looks of it, it is the same old stuff. Repeal the health care legislation, reduce taxes, and cut spending. Reduce the budget deficit. But they forget to tell how they are going to do it without discussing the increasing bill for the Social Security, Medicare and Medicaid bills and not to forget the defense bill. They want to get tough with Iran like how invade it like we don’t have enough problems in Iraq and Afghanistan that we need to spend hundreds of billions of dollars to invade another of the messiest places on earth-the Middle East.

To tell you the truth, I am sick of hearing about the same old reruns about how the Republicans are all for tax cuts and spending and small government and how the Democrats are the tax and spend party. Don’t our brilliant representatives in both parties have new or completely fresh ideas to bring to the table? Anyway you see it there is going to be a tax hike (whether we like it or not) spending will not be cut (unless we touch the above mentioned items) and face it there would never be a small government even when the people say otherwise. So unless we hear the truth, this new “Pledge” will remain what it is a “Pledge” without any real teeth to back it up.

The Expiring Tax Debate

There are a lot of talks about the President Bush Era tax cuts which will be expiring at the end of this year if no action is taken by the Congress. Since the Congressional elections are fast approaching, the tax cut to be extended or let it die will be decided after the November 02, 2010 elections. The Democrats controlled Congress wanted to let it die this year but some of their members are being spooked into saying it should be extended. In it People earning 200k or a couple making 250k will be hit and all the tax rates of the Pre Bush tax cut era will be restored.

Many economists are now saying that the recovery is so fragile that the tax cuts should be extended but there are some who say that it should be extended only for those making 250k or less and above that the “Rich” should be taxed at the higher rate. Is it fair or not that is not the question? But can we afford it or not that is the one. I believe that instead of deciding if we should extend it or let it expire. We should scrap all of it and start with a new one in which people making 500k or less should be taxed at the Bush Tax era levels and above that we should have new tax structures so that we can balance the budget. But here I should emphasize that more tax revenues coming as a result of it should not be spent on another of the run of the mill programs but should be specifically mandated to reduce our national debt.

I Still don’t get these People

I was reading a newspaper the other day and came about an article regarding how a bank has lost money because they did not expect the recession to hit so hard. In other words they made some wrong bets. It is so mind boggling to me to read these kinds of things. I can understand a layman caught up in this recession since they don’t have the time or the analytical knowhow to judge what is going on in the market. But I still refuse to believe that the financial institutions with all their big economic departments and all the highly educated employees can’t see the crisis coming.

What I get is that when the going was good everybody was praising how their financial wizards are making tons of money for them but along the way these so called wizards lost track of what they were supposed to do-making intelligent and informed decisions and they made some risky bets which they knew (as I believe so) were not great for their employees but they did it anyway and end up costing the whole economy a bunch (okay billions or trillions of dollars) in losses. And now the big economists are still scratching their heads of what did hit the economy and all their financial models have come to naught.

The Elections are coming!

Only few weeks are remaining and then we would have the elections for Congressional seats. By the look of the polls coming out each and every day from different sources, the Republican are all set to gain seats while the Democrats are going to lose big time. But this always happens when the incumbent party is in power (in this case the Democrats). This time around and as many times before, the economy is the main issue. But now we have the so called TEA party people (who may or may not be Republicans) pushing for a change.

This trend is being fueled by not only the economy but what people feel is the sense of the lost of direction the country is going through. This maybe a phenomenon or just a fad, only time will tell. For now the economy is making headlines and you know that when people don’t have jobs they will turn out big time and cast their votes for the people whom they feel will make the economy better. I don’t know if that will immediately happen, but this is a chance to vote your likable (in terms of the policies or agenda) candidate in and see what they can do to change the direction of the economy.

So the Recession is over, now what?

Finally the recession is over. Actually it had been a year since it is done with but it was announced a few days ago. Hurrah, now what, do we feel ecstatic, jubilant or just plain puzzled since it does not feel that way. In fact fear is being aired that we may be heading to a double dip recession (meaning back to back). It does not feel the end of recession when the unemployment rate is still hovering around 10 percent (officially) and unofficially it is near 20 percent (if you count on the discouraged, the part times, the people in school, the out of benefits people, etc).

If the jobs are being created at a pathetic rate not even counting the population who is entering the labor force, the recession will linger on. People don’t really care what the officials are saying is the end of recession, if you don’t have a job and have applied all over the place and even with your best qualifications you are being shut out of the labor market (due to age discrimination or too many applicants) and if you have to uproot yourself and your family and move to a place where the jobs are and you are not sure if you are secure in that position, then the recession goes on.

Saturday, September 25, 2010

Birthday Parties

Birthday Parties are always fun. If you want to do in your house, then it becomes a major project but even if you are doing outside the house, you can only outsource so much. The invitation cards, whom to call (trying not to offend anybody), how much to spend, what kind of cake to order or have the theme done on it. Then you have to order balloons in various shapes and sizes. If you are doing it in your house, then you have to make sure everything is in order by the time the party starts because you don’t want to have a fiasco and embarrass your child. Then you have to make sure your child is well dressed. The cameras and video cameras should be charged and ready to go.

Once you have decided that you do not want to take the hassle to do it in your own house, then the choice becomes where else you should do it. There are now so many places where kid’s parties are being staged that it just becomes a search on what is the best place your kid will be happy in. You also want to stay in your predefined budget, but here you can find lots of affordable places to choose from. One of the best things about outsourcing is you have to do minimal of things since the place takes care of almost 80 percent of the stuff with the rest on you shoulders like ordering balloons, sending out invitations and ordering a cake. Once the party is done then there is the job of sending out thank you notes to all the participants. But you know what the best thing is the cheerful face that you see in your child’s face which makes it all worthwhile.

Friday, September 24, 2010

On the lighter Side- Movies – Friday the 13th (2009)

If you have not seen the original Friday the 13th, you should see it for the story not for anything much. But this new one is different than the one in original and far better than the sequels that came by. It is again centered on a deserted or so it seems Crystal Lake where murders were happened a long time ago. Again Gory but far superior to the others even the original one. Watch it if you can stomach some gory scenes.

One thing I don’t understand about these horror movies. In it I see the utilities running even if the area is abandoned. If you believe the movie is actual, then who pays the bills. Does not the utility people come and see to it that the bills are being paid or the police can also come. Anyway my observation just out of curiosity.

Saturday, September 18, 2010

On the lighter Side- Movies – Land of the Lost (2009)

Will Ferrell stars in this stupid and ultimately unnecessary remake of the 70s series regarding how three people got lost in a land where dinosaurs and strange creatures rule. Although there are some funny moments and jokes, overall the movie could have been a TV movie. Avoid it if you can. Not Recommended.

The Ground Zero Mosque Controversy

Now after a long time I am stepping into a landmine by stating my two cents about the Ground Zero Mosque Controversy. First of all it is the right of the developers to build a mosque at Ground Zero as enshrined in the constitution. But do they have to build it so near to Ground Zero. Due to the highly stubborn attitude of the developers, they are sticking to their guns. If it has been acknowledged by the Imam of the said the mosque that had he known that the mosque will cause so much controversy, he would have not build it, then why he keeps on insisting on building it there. There are so many places in Manhattan the he could have chosen anywhere but he keeps on insisting of building it there and not heeding the voices of the majority of the people.

I really don’t understand these mosque builders, when there is so much opposition to building it why they keep on insisting on it, don’t they not care how much hatred and animosity they have created against the Muslims. I just believe that since the site is so much controversial, they should shelve this project and start somewhere else otherwise whatever goodwill and tolerance there is for the Muslims will be vanished and then they would have nobody but to the blame themselves.

Forecasts, Estimates and Statistics

Okay here is the deal, we keep on hearing all kinds of forecasts, estimates and statistics and we are kind of getting lost in all of these. One person’s forecasts can be another person’s accurate description of something. And will all these forecasts, estimates and statistics there is a highly great chance that they can and are manipulated on a daily basis. Not only by individual politicians but also by government and private industry for their own purposes just to gain support among public who are highly susceptible to it.

Take for example, the unemployment numbers, the only numbers to be believed are the government ones but they don’t show the true picture. Same is true of the forecasts and statistics for the deficit which changes frequently and is highly susceptible to manipulation even though they may be released by a non partisan group. Same can be said about the gimmickry that is used to balance the state budgets with estimates and forecasts that are subject to scrutiny if somebody cares to do it. The point I am trying to make here is that all these forecasts, estimates and statistics should be viewed with who is trying to present it and what purpose and not be swayed by the any of them because they can be changed, challenged and manipulated by anyone for their own purpose.

The Nightmare Traffic on Roads

Traffic is getting worse day by day where I live. We have the same roads being fixed again and again but the numbers of cars (and other vehicles) are increasing at an alarming rate. And if there is an accident, then we have a big nightmare going to work. Unless we start building new highways on top of the already build roads, this traffic nightmare is not going to end. But how do we build when we have a trillion dollar deficit staring us every year. Due to this traffic, we lose millions of man hours sitting in our cars wasting our time waiting for the traffic to clear up. And despite having an excellent train and bus system, we are still driving our cars to work and other places.

Although I acknowledge that driving is fun but it becomes a nightmare when you have to sit through traffic for hours in a commute which should hardly take you half an hour. And then the amount of gasoline that we waste running our cars and harming our environment in the process is not counted. And if there is a road construction then that is another nightmare to consider. During rain and snow conditions, traffic again comes to a standstill. We really need to build more roads and the money can come from increase in federal tax on gasoline. Although I also hate to increase any tax right now but it is a necessary evil which will have to taken either now or in the future to build more roads and ease our traffic nightmares.

Friday, September 17, 2010

The Sale Trap

Since this recession, there have been lots of sale going on since the retailers are afraid that they will be stuck with unwanted inventory. But again the sales keep on going on year long and it is this sale trap that the consumers keep falling on. The prices are already marked up high enough since the retailers have to pay fixed overhead and real estate expenses and when the merchandise does not move fast enough, the retailers resort to sale tactics or gimmicks to entice people to buy stuff even if they do not want to.

Don’t people have a little self control and not fall into the sale trap and buy stuff when they don’t even have to. We have been so used to sales that even if we don’t want things we buy them out of the habit that maybe we would not find that kind of sale again. The slogans like the best deals or lowest price of the year or early bird special are just traps to lure already heavily indebted people. But I want to emphasize that the retailers are not the culprit since they have to sell stuff in order to survive but what about the consumers, can’t they show a little bit restraint and not buy stuff and control their impulses. It is hard but it can be done.

People are buying

When buying nowadays you would imagine that since there is recession less people would be buying but it seems that whatever people have to buy they will buy since I see long lines on the cashier side. Recession or no recession there will always be people who are employed and the necessities would be taken care of. For example, back to school sale maybe lackluster for retailers but I still saw lot of people buying stuff for their kids. The recession would not stop people from sending their kids to school or starve them of the things they will need for the new school year.

The same can be said about everyday stuff that people need or once in a while they want to indulge, they will continue to buy and on occasions they will have to necessarily spent money. The fact is that the retailers need to reduce their margin of profit in order to compete and lure customers. They have to make an effort to adjust to this new realization of frugal customers. Once the margin of profits is adjusted to realistic levels, then we can see more customers coming in and buying stuff.

Erosion of Skills

If you are unemployed long term, it is natural that you will lose your skills honed over years in office slowly but surely. Just sending out your resume day in and day out without updating or maintaining or even acquiring new skills just erode whatever remains of your skills. The employers can understand that in this economy, a lot of people have lost their jobs and it is hard for them to find a job fast enough. But that is still no excuse to not acquire new skills. Just sending out your resumes doesn’t make you stand out from other more experienced applicants.

In order to stand out from other applicants, you need to keep on constantly updating and acquiring new skills. And you can do that even without spending much money through online courses and just keeping yourself relevant about the progress being made in your field. You can even change your field (but it is really tough) by taking some online and offline courses to show to your prospective employers that you were not just churning out resumes but you were also on your toes keeping your skills relevant. That way you can stand out and be noticed.

The New Real Estate Signs Coming (Maybe)

I always see signs on the front yards of people stating the for sale signs for houses. Some are very obvious like for sale by owner, or for sale by the respective real estate agencies with names and telephone number of agents. Further more when the sale is in the final stages, I see signs like under contract or sale pending. I start to wonder that in this economy with the housing sales under a lot of pressure and people are having a hard time selling their houses, don’t we need to be creative in order to sell a house.

I have read stories that how some house owners have given cars and buy one get one free house to sell their houses. But they are the exception and it is not advertised prominently. There is a need to highlight out of the ordinary statements to move your house. (This is just humorous suggestions and not intended as serious advertisements). So lets see what should people advertise to sell their houses like “I am desperate please buy my house”. “I have taken a job in another state and can’t afford two mortgages”. “I realized after I bought the house that it costs too much to maintain”. “The School district is not to our liking”. “This house has too much property tax”. “I will pay your mortgage for one year”. “I will buy your house if you buy mine”. “I got bored with lawn mowing”. You can make up a lot of these in order to sell your house.

It’s the Economy, Plain and Simple

The Economy is coming up more and more because of the mid terms elections and the incumbent politicians whose seats are up for grabs are nervous about it. To state is as simple as possible, it is always about the economy. If people don’t have jobs that will translate into losses for the incumbent party no matter what the affiliation. If you see that we had a recession after the first Gulf war and even winning the war did not help the ruling Republican party win the election. Same was true of in 1980 when the Republican Ronald Reagan won the election because there was a recession going on.

This recession that we are currently in is unique in the sense that everybody blue and white collar workers are hurting and the rise of poverty in America has become a troubling state of affairs. People are very angry that we are playing by the rules and allow a free trade economy while every body is taking advantage of us. And to be fair that it is true but people have also to realize that we are not producing that much to begin with, so there will always be an imbalance with the rest of the world unless we shut our selves in. Any way, to sum up the situation, unless the economy gets better, the election will be like a referendum on the current administration policies.

Saturday, September 11, 2010

The 9th Anniversary of September 11 Attacks

Today is the 9th Anniversary of September 11, 2001 attacks that have forever put a mark on the Psyche on America. I vividly remember that I was working in Midtown Manhattan that the first plane attacked. We were listening on the radio and we heard after a while that another plane attacked the second tower. At first we thought that the first plane had accidentally hit the first tower, but when it hit the second one, it was definitely deemed a terror attack and then another one hit the Pentagon and then in Pennsylvania and we were ordered to evacuate our building.
It was so much chaos that we were hearing several planes are in the air to attack us. It was the most devastating attack on the U.S. soil. I saying this because the Pearl Harbor attack in 1941 was not on U.S. soil since Hawaii became our 50th State in 1959.
We have been ever fighting since 2001 to make us safe from the Terrorists. Here I want to emphasize (although many will disagree) that the Terrorists have no religion. They are heartless and to achieve their agenda will kill anybody who stands in their way whether innocent or not. Although the terrorists that struck the U.S. used the name of Islam but anybody can use it to further their cause. The Islamic world should start seeing what the terrorists stand for and fight them with whatever force they can muster since if they do not then other forces will do it for them then they will not have anybody but to blame themselves.

The Lessons (if) learnt about the Great Recession

Although the current recession has not been officially finished but the lessons are being learnt to avoid the next big one. I don’t know if the lessons will be learnt or not but right now it seems that people are being forced to change their habits like spending less and saving more. Also many people are being put off by the ownership of the homes. Although mostly they are being forced to and not by their choice. If the terms of the mortgages are so strict, obviously people will not be able to buy a house.

We are being forced to change our habits and delaying our instant gratification because we simply don’t have the money or not have enough equity in the house. Another thing is that this economy has humbled even the highly educated folks like doctors, lawyers, IT people etc who have become unemployed who did not use to before. More and more people are saving and vacationing near their homes and have curtailed their spending habits so that they can ride out this economic thing. But also people have started to realize that the future does not look that rosy right now and they want to be prepared for the next big one. I do hope that the lessons here are really learned and not just for the time being.

The Lure of the United States

No matter what the faults are that people find in the United States (and there are many) it is a fact that it is still the foremost destination of people all over the world. Even in countries that are traditionally well off (like the European and the Middle Eastern rich kingdoms) many of them still wants to come to the United States if given a chance. Even in this economic climate that we are in, if you ask a person (educated or not) from a developing country where he or she wants to migrate, the answer will be United States and then if they are unable to get visas here then the next options are other less restrictive countries. What is that that have made this country such a magnet for immigrants all over the world?

Maybe it is the movies and the culture that shows that even a person with a lower economic back ground can make it here. Despite all the history of the United States (regarding the Native Indians and African Americans and also Chinese) no other country in the world welcomes as many immigrants as the United States does without regard to any discrimination and gives it an opportunity to excel if they can work hard. It tries to integrate them but also lets them celebrate their own ethnicities and nationalities without being frown upon them. It is the welcoming nature of this country that keeps on attracting people here even at the cost of their lives.

Monday, September 6, 2010

Is the Health Care Sustainable?

During the debate about health care, a constant theme was about the cost of the bill. Ultimately the bill was passed with much fan fare but without debating how the long term health care costs will be borne out. The United state along with other western countries prides themselves on their health care but is it sustainable in the future without being funded by public money more. Although people don’t want to talk about it but the health care is becoming expensive every day making it the number one issue in the United States. People are clamoring more for the health care making it impossible to cut the health care bill in the future.

A substantial portion of our federal budget is devoted to health care and unless something drastic is done to contain the cost of health care, we won’t be able to sustain it without sacrificing other areas of the budget. An honest debate by politicians should be a start, although it will be almost impossible for the people to elect that politician who cuts their medical benefits but leaving this problem to the next politician will only make it worse. The health care costs are getting out of control and unless everybody starts paying more for it and reduce its expenditure we are in for a time of shock treatment.

The Coming Pension Nightmare

I have been writing about the pension the public sector employees are getting and how it is going to lead us all in trouble. Although since the public sector employees earn less than the private sector employees, they are entitled to their pension but when there should be line drawn about how much pension these employees should get. States that are in financial trouble are skipping pension payments into the pension funds each year just to balance their budget.

Even with skipping pension payments, the states are having trouble balancing their budget but in their infinite wisdom, they have been giving employees raises that ultimately raise their pensions. This cannot go on and this Pension nightmare will have to come to an end. If the private sector employees even with their higher pay are having pension plans replaced by 401K and other private retirement plans and increasing paying their share of the health insurance. It is time now to replace the pension plan in the public sector also because the Pension plans are already in deficit all across America so there is no point keeping it growing. It should be frozen after fulfilling their present obligations and the funds transferred to a privately managed 401K and other private plans if we are to reduce our states deficit and not burden our future generations (which are already burdened by student loans and family obligations and fewer job prospects).

The Always Unhappy Economists

The Economists are always unhappy with the human behavior. Although they assume that the humans act rationally in financial matters but then when something goes wrong with that rationality they start to question that rational human being. Consider for example that during the time of pre-recession, they were lamenting that the people are not saving enough and indeed the saving at one time went to the negative. Now that some sort of normal behavior is being shown that of savings rate in excess of six percent, the economists are again complaining that this rate of savings is not conducive to the economy recovery. That people should start spending once more to help the economy.

Well they people are seeing the light (or at least they are) by trying to replenish what they have lost during this recession, a loss of home equity , reduction in the value of their 401K funds, lower stock values and a constant news about the state of the social security funds. Apart from this, they are also reading news about the state of the economy, locally and federally and they are scared about their future. Although I can understand that if people don’t spend, the companies cannot grow and hire more people but still people are scared about their jobs prospects and uncertainty about the economy so they are find it prudent to save as much as possible and until the uncertainty is somewhat removed or reduced, they will not spend.