Personal finance and the economy

There are many factors contributed to the economic problems we are in right now. One of which actually ignited the 1990’s with speculations and the dreams of everyone involved which is the dot.com boom. At its onset, and during the explosion, of the dot.com business people were acquiring wealth and became extremely secure in the continuous success of the dot.com industry as well as their own business.

Investors from all walks of life expecting a 20 percent return on their money per year forever became evident that it did not hold water. This; however, caused the same people to mount up a huge amount of personal debt. When that happens, and families get in tight budgets, it will result in consumers to reduce their debt by conserving and not taking on any additional debt no matter how minimal the amount is. Now consider this. Every business in the world depends on consumers walking in their stores and businesses and purchases their products. When that does not happen it will start the domino effect. One thing leads to the next. If the company’s profitability is reduced then they will have to lay off workers in order to stay afloat. This will add fuel to the fire. Now we have more people with huge amount of debt and now without a paycheck.

The key thing here is to get people back to work. The president has a great plan on how to stimulate the economy. We always hear about the stimulus plan and bail out money. However, this is not really his main objective in how to revitalize this economy. His main goal is to not only get people back to work, which is a short term goal, but also to have a more globally competitive work force that can compete with technology giants such as China and Japan on a long term goal basis. His first congressional address, he laid out the core of his plan on the fact that we need to start from first grade, keep our kids in school, educate them the right way and product a more capable, technologically competitive citizens that can produce more state of the art products which in turn will keep our hard earned money in this country instead of financing foreign countries.