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Missed Fortune – Create Your Own Economic Stimulus Plan — Save Yourself Because Big Government Can’t

Posted on | February 16, 2010

With the economy taking one of its most historic swan dives the past couple years, almost everyone has felt the impact of the global drowning.

Whether you’re in real estate, high tech, financial services, the arts—or even sandwich-making—the ripple effect has been more like a whirlpool for many Americans.

superhero 300x199 Missed Fortune   Create Your Own Economic Stimulus Plan    Save Yourself Because Big Government CantWho’s stepping in to save the day? Who’s going to perform critical emergency resuscitation? Is the government’s economic stimulus package really the thing that will revive us all?

The federal government has been doing its best “lifeguard impression,” reaching out to scoop up the banking, insurance, auto and other industries.

In doing so, the government has undertaken some risky strategies.

The bailout efforts have all but nationalized some sectors while marginalizing others. Funded by tomorrow’s dollars, today’s national debt is astronomical, and it is escalating by the moment.

In fact, half of the $3.6 trillion President Obama has earmarked for the economic stimulus has already gone deficit.

And while many of the banks and institutions that took Troubled Asset Relief Program (TARP) money have already paid that back, the fact is, the federal deficit was about $1.8 trillion for 2009 alone. That was quadruple 2008’s deficit, and it brought our total national debt to nearly $13 trillion.

Is all this emergency intervention the best response? I don’t think so.

Recessions are nothing new. The economy naturally goes up and down; booms and busts are almost as American as apple pie and baseball. The country has gone through at least five major recessions in the past thirty years alone. In fact, on the average, we go through these cycles about every eight years.

Sometimes the cycle lasts longer, such as the 1990-2001 cycle. Sometimes it’s a shorter run, such as the 2002-2008 cycle. And while financial strategists like me argue against intervention, Congress insists on trying to spend the country’s way out of a recession.

But as the past has shown, the results of the government’s efforts are often only short-lived.

Federal financial intervention is sort of like chugging on an energy drink. An energy drink’s infusion of caffeine and sugar provides a boost for a few hours, but once the effects wear off, there’s a big crash that follows.

Right now it might look like the economy is beginning to rebound. But this is likely the impact of federal spending that has caused a surge in housing, a drop in interest rates, and a spike in car sales from last summer’s Cash for Clunkers program.

The long-term effects remain to be seen, because we’re operating on an economic “caffeine and sugar” high.

The reality is that during the last couple years, businesses have suffered, and they have been forced to make changes. They have had to cut costs; they have had to find ways to be more productive; and in many cases, they have had to lay off employees.

Their hard-learned lessons will not be quickly forgotten during the temporary boost from Congress. They have found out their companies can now produce more with fewer expenses and a smaller workforce. They are cautious about re-hiring employees. That’s why we see unemployment remaining high.

In fact, unemployment usually doesn’t bounce back for eighteen to twenty-four months after a recession has flattened out and turned around.

The best advice in these times? Stop waiting for the government to rescue you. Perform your own Creative Practical Recovery (CPR) by identifying your own individual economic stimulus package.

Learn how to protect yourself, your family, and your future using sound and proven strategies and then practice the skills to thrive, no matter what economic storms might be bringing others down.

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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