U.S. Gov't Used the Wrong Economic Strategy

U.S. Gov't Used the Wrong Economic Strategy

As I write this post I am in Thailand. I continue to read the economic news back in the states and receive daily briefings. The stock market is up and employee pay has increased to an all-time high. Yet, the general public still feels that the recession never ended. The unemployment rate remains around 9%, many have lost their homes to foreclosure and those who still have a home have found that the value had diminished considerably.

One could determine that the results are clear when you look at countries such as Thailand - the U.S. Government made strategic mistakes when dealing with The Great Recession.

I have said all along that the stimulus package, that has now helped contribute significantly to the U.S. debt, was strategically handled wrong. The money was given to large institutions to shore up their asset base or given to finically struggling companies to erase bad debt when instead the money should have been given to the people. If you want people to pay their subprime mortgage payments, don't give the money to the bank, give it to the people. Bailing out struggling banks and automobile manufacturers just brings their accounts back to zero, it does not grow the economy. In other words, most of the money spent was used to erase debt and pay old bills, not grow the economy to the next stage. That is why we are seeing minimal growth (0.2%) while Thailand is expected to see a 3.8% growth over the next cycle.

Thailand entered the recession after the U.S. and it too had to introduce a stimulus package. Only the Thai government gave the money to the people, who then went out and spent the money and stimulated the economy.

Thailand recently collected it's annual income taxes. The economy grew faster than expected and the government collected nearly 15% more tax revenues than it had projected. While U.S. Representatives are looking for ways to cut billions of dollars from its budget, the Thai government has money left over. One hundred twenty billion bahts are being used for a local beach clean-up and revitalization project.

Meanwhile, the U.S. government is still in debt, the jobless rate is still around 9% and businesses are still not hiring.

Lets see how the U.S. does on April 15 compared to Thailand.

S.A. Romeo
The Strategy Expert