Watching President Obama…

I’m watching President Obama’s speech right now.

He just talked about taking steps to help Americans gain access to credit so that they can buy cars.

Has auto financing been a problem? Are people who can afford to purchase new cars being denied credit? Don’t people need jobs before they can buy cars?

Are you guys optimistic as to where this country is headed? I’m skeptical (but I’m ALWAYS skeptical).

20 thoughts on “Watching President Obama…”

  1. This president is running up a debt that this country will never, ever be able to repay.

    Thank God I don’t have kids. I wouldn’t even know how to begin apologizing to them for bringing them into this mess.

    No, I’m not optimistic. Not even a little bit.

  2. No. Not optimistic at all.

    What we have and are increasingly getting is governmental control over industry while retaining nominal ownership in private hands.

    This will stifle the economy and cause much ruin. Just this morning I read that Cessna is shutting down development of its midsized corporate jet laying off 1600 employees because corporate jets are no longer PC.

  3. New book suggestions:
    How a Second Grader is Smarter Than Politicians

    I Will Teach You To Be A Second Rate World Financial Power

    Presidents Are Idiots and I Can Prove It

    No, I’m not too optimistic, but if we can manage to survive until mid-term elections and then stave off the rush to stupid policies, we might be okay. Maybe.

  4. Here is what I do not understand, and I am not an economist. He said if you are going to buy a car, buy an American car. Am I incorrect in thinking that most American cars are made in Mexico, even my 1989 Ford was made in Mexico. My current Honda, was made in Ohio.

    I am not sure there is a better choice, but come on I’d think supporting the plant in Ohio is just as good as supporting the plant in Mexico.


  5. I don’t consider myself an optimist. I have a distrust of politicians as a whole. It’s not a question of red vs. blue…all politicians play the same game.

    And am_sa_lp has a good point. Many foreign cars are actually more American by content than the domestics.

  6. 1) A car is essential. One cannot work or live without a car, unless spending time to get things done without a car is one’s work.

    2) People who can afford to purchase cars or anything else do not use credit to do so. Unless you are using credit cards for the float or the marketing games, you are using it to purchase things you cannot afford. That is what credit is for. It isn’t a good thing, but without people to spend money they don’t have, capitalism doesn’t have a chance. And with them, we may not have a chance either! There is no such thing as good debt. Personally, I think financing a home is the worst debt ever, because you are banking on a future and income that is not in your hands, and you are overpaying tremendously over the typical 30 years – because you were taught that you were supposed to grasp that as your dream. And a dream it is, because you are not a homeowner until you have paid for the home. You are a debtor.

    3) This country is headed toward fundamental change. What has happened demonstrates why libertarianism cannot work as well, because people in general do not have or use wisdom, and generally do not think for themselves. We have too much of the wrong kind of freedom, and we misuse it.

  7. in regards to local / foreign content – most people don’t know what they are talking about (no offense – as it’s not that easy to follow.) I work in the auto industry for a foreign supplier – and there are many ways for things to be “local.” However at the end of the day, the big company @ home is the one making out the best. So despite the fact that your GM may be built in Canada, and your Toyota might be built in Indiana – the vehicle built by the american company is going to keep most of the money here.

    It’s not an easy thing to track, and/or figure out – but I assure that it’s the case.

    As far as the original point – I think it’s very easy to single out one isolated point and criticize it. Overall, I agree with what Obama is doing. Though I also question all politicians, I think he’s the best guy for the job right now. To each their own

  8. I am absolutely optimistic.

    The economic situation is the pits – but I *do* believe in the capitalist system we have. Perhaps with more faith than those jumping up and down screaming about socialism (and by this I don’t mean you, JLP).

    And in the meantime, I am falling all over myself with joy about the appointment of Steven Chu to Energy, to giving money to NSF, to putting actual respect towards science, scientists, and basic research. When Janet Napolitano says with respect to the current swine flu “crisis”: “”We are making all of our decisions based on the science and the epidemiology”

    I think in a few years when we’ve moved past the current economic issues, we are going to be on *infinitely* better footing as a nation, both at home and internationally.

  9. I am not optimistic at all. All politicians and big corporations keep screwing us over at every level.
    I would never buy an American car again, everyone that I have owned has been a problem while every import that I have owned has not.

    When are they going to truly help out the people instead of big business and politicians?

    I have five kids and I hate to think of what they are going to go through in the future.

  10. I don’t think the world is going to end, just our system as we know it. Much of Europe is extremely socialized and they still manage to get along day-to-day. What we need to embrace is that we’ve put ourselves in the position where the US will no longer be the world’s ONLY superpower. We will still be a big player, just not the only player.

    I am with David #5.. Political persuasion makes no difference. Either party is in the business of pissing our money away. It is just the choice of what to piss it away on. I guess I’d rather have it be pissed away on infrastructure and domestic programs more than preemptive wars and the military industrial complex.

  11. “This president is running up a debt that this country will never, ever be able to repay.”

    Um…didn’t the last president do that too?

  12. My husband and I chose to take a walk rather than watch the President’s speech. I chuckled when we started walking that I expected that the sidewalks would be filled w/Republicans strolling and enjoying the spring weather 🙂

    The last time I watched his speech I was yelling at the TV b/c of his/his speechwriters’ poor and inaccurate example of his illustration to defend his reasoning in attempting to limit charitable deductions at a 28% tax rate. He cited his own situation, being in a 39.6% tax bracket as being unfair to Joe the bus driver, earning 40-50K per year, who only gets a value of 28 cents of his charitable contribution dollar (while P. Obama would earn 39.6 cents of his donated dollar.) First of all, Obama’s itemized deductions would be getting phased out, so he is not earning the full tax rate on ANY of his itemized deductions. Second, “Joe” wouldn’t necessarily be at a 28% tax rate either, esp. if contributing to a 401K, etc.

    So if I’m going to give up my valuable free time, I’m certainly not going to listen to someone who can’t get the facts straight when speaking to an audience of millions. Maybe the sheeple are buying into the bull, but I’m not.

    And when Obama says that people will continue to give to charities b/c they want to and not b/c of the tax deductions, he’s gravely mistaken. In turn, this will affect innumerable “points of light” in the community who are trying to help the vulnerable and needy.

  13. Generally, I am an optimist, but not now. I love this country. I think even our poor citizens are better off than many of the middle class in Western countries. This is why I don’t understand the desire for socialism here. Have the people who want this spent some time overseas to experience socialism in play? Socialism’s great attraction is that it takes care of all its people. But the reality is it does a much worse job at caring for people. There is higher unemployment, worse health care and coverage, higher poverty, more crime, lower quality education, and more in most of the Western socialist economies. There is no perfect solution, but the U.S. has long had a better approach in its free market capitalism. Even at this dire time in our economy, people here are still better off than the good times in other countries. For those of you who disagree, pack up your stuff and spend some time traveling the world. It won’t take you long to want to come home.

  14. Regarding Scott #11’s question about the Bush running up a deficit that we’d never be able to pay off:

    Not really. It was bad, but notice that the Bush deficits had been shrinking until the balance of power in Congress changed. And now the worst of the “Bush” deficits is being quadrupled.

    As to the original question: I’m not optimistic. But we did survive Carter and FDR, we may be able to survive Obama.

  15. Lots of rhetoric here.

    With all due respect, perhaps we should just stick to finance issues and leave politics at the door or to some other blog.

    I come here to read about finances, not about how much Republicans loathe Obama or how much Democrats hate Bush.

  16. @#15, Brian

    I was speaking of taxation issues, which is a financial issue. Buying American cars/cars made in America is a financial issue. Wondering if our children can afford to pay off the debt our country is incurring is a financial issue.

    Yes, a bit of rhetoric interjected here and there, but all in all, financial topics are being discussed. We can still discuss things in our country, right?

  17. @Scott:
    “’This president is running up a debt that this country will never, ever be able to repay’

    Um…didn’t the last president do that too?”

    Yes, he did. But his $400 billion wrongs plus Obama’s $10 trillion wrongs don’t make a right.

  18. In regards to comment #6.

    A car is not always essential. Yes, in rural parts of the country it is but even in most small cities there is enough alternative transportation that it is not necessary. Even the town I live in, Population 70,000, where the bus doesn’t come very close to my home, I could get by with a bike either “locally” or get me to the closest public transportation point. It would take more effort on my part but would be much cheaper than buying a car.

  19. Desperately trying to be optimistic… Not sure though. What bugs me most is not as much as spending – we need to get out of the deflationary cycle – as a) spending for pork b) re-writing laws after the fact, trying to pass laws that are obviously unconstitutional and violating existing laws. Take the Chrysler bankruptcy – the money are stolen from higher priority lenders with secured debt and are given to lower priority lenders with unsecured debt using TARP money as a leverage to make the majority of higher priority lenders agree; then villifying a few funds who dared to try to protect the rights of their investors – and not some rich investors, but all of us – teachers’ retirement funds, pension funds or anybody with money in bond funds.

    Back to subject of cars, in many areas a car is essential. It’s not essential in places like NYC, in fact over there it is a major headache. If you live in a small town – it depends. If you can walk/bike to work and stores or get there by public trasportation in a reasonable amount of time (and at a comparable cost) then a car is not essential. In most places in the US the car is indeed essential – you need it to get to work. And sometimes taking a loan is useful provided that you can afford it and that you plan to drive a car for a very very long time: if you live far from work, if you know nothing about cars, if you cannot afford a car that breaks on your way to work or time to spend in repair shops. I took a loan on my first new car in 1987 (paid half, financed half), and I’ve never regretted it. I repaid it a couple of years later. Incidentally, this was my first new car but my second car overall. My very first car was a used car and after I totalled it and calculated how much it cost me over 4 years I had it, it turned out I paid more than the cost of a new car. Since then I’ve been buying new cars for cash, but now I have a whole lot more money than I did back then.

    As to buying American cars – it’s enough to compare the prices of 3 year old cars with new cars of different models to see how Hondas and Toyotas hold value so much better than American cars. When American companies learn to make cars that are as reliable as Japanese cars and hold their value as long, then we’ll talk.

    @Yana: ” There is no such thing as good debt. Personally, I think financing a home is the worst debt ever, because you are banking on a future and income that is not in your hands, and you are overpaying tremendously over the typical 30 years – because you were taught that you were supposed to grasp that as your dream. ”
    1. Not all debt is bad. There are business loans, for example, or any loans that one takes to make more money. Depending on where you work, your employer probably takes loans to expand, or even to manage timing of expenses and profit for day-to-day operations. Biomedical companies use loans to finance research of life-saving drugs.

    2. When you are renting instead, you are paying money too. You cannot say how you “overpaid” over 30 years unless you also consider how much money you spent on rent over the same number of years. In fact, when the real estate is fairly valued, the amount of money you pay in rent is close to the amount you pay in mortgage (both principal and interest) and taxes for a similar place, especially if you can deduct all interest and taxes. When I bought my very first condo, I actually saved money compared to rent. Even if initially you are paying more, often after a few years you end up paying less for the place you own. Now, if the housing is overvalued than the cost of ownership is higher. In this case, it makes sense to wait. But you cannot make a blanket statement of how much you overpay for a house unless you consider what you would’ve spent on rent. Plus, if you lock in low interest rates you are hedging against inflation. With all of the government’s printing money and borrowing, the probability of high inflation and/or higher interest rates within a few years is extremely high. If you are renting – your rent will go up. If you have borrowed at low fixed interest rate, the inflation gradually reduces your payments to nothing.

  20. We’re all going to pay for this giant bailout.

    I wonder if I can get help to buy a Toyota … probably not.

    The light at the end of the tunnel is just a couple of photons now. We’re got a long way to go.

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