So I got this email from my friend Anthony the other day … not sure of the origin, but I loved it:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From the taxpayers.

Q. So the government is giving me back my own money?
A. Well yeah, but only a smidgen of it.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn’t that stimulating the economy of China?
A. Shut up

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This is great … and so true of the mindset of our government as a whole (both Democrats and Republicans): use smoke and mirrors to make us briefly feel better, all while failing to deal with the real problems our country is facing.

Today I was fortunate enough to speak with the CEO of a publicly-held bank for a bit. It was fascinating. One thing that stood out was (paraphrased): “If foreclosures (at their highest rate since the Great Depression) stopped today, we would still feel their effect for another 12- to 18-months.” (This is due to the spiral effect of how foreclosures reach into nearly all parts of our economy.) “However,” he continued, “the rate of foreclosures is not stopping, but still increasing.”

His conclusions: (1) Things will definitely get worse before they get better, and (2) This will last 2 to 3 years, minimum.

As a small business owner, I can feel it clear as day in my business, and I hear about it from many other business owners. This isn’t like the “dot com” bubble burst that sounded terrible but didn’t really affect each one of us, this is a serious economic problem.

But he did offer a little good news: Foreign nations own so much of our debt (Germany, for one, owning most of our bad mortgage notes) that they can’t give up on us now, and need us to come out of this. And he also thought that inflation wouldn’t go crazy (it’s a “supply and demand” problem, and most of our supplies are going up and demand going down, causing lower prices to counteract the inflationary pressures of oil’s increases.)

The CEO suggested that we don’t make a run on the banks and take our money out, and he showed why banks are still probably the safest place to have your cash. But he did suggest that we carefully investigate what lines of business our banks have been heavily invested in. He strongly advised reconsidering leaving your money in banks which have a high percentage of their business in construction loans; mortgage securities; and/or consumer lending (importance in that order). (How to figure out if your bank is in these lines of business, I don’t yet know … but it makes sense.) These will be the banks with the most risk of failing as we slide down this economic slope which we are just now starting to feel. His take on things was fascinating, and more than I can summarize properly on this humble little photography and travel blog.

But I do know that creating (or participating in) panic will only make the slide worse for everyone. Instead, why don’t we show our “American ingenuity” and move our money into smarter places; begin to live within our means (and save!); get educated on the economy; and force our lawmakers to do the right things by writing and pressuring them to make real fixes rather than slapping on more bandaids?