Included in every health insurance and HMO contract is a clause known in the industry as the Pre-Ex clause. This is short for "pre-existing condition exclusion" clause. The pre-ex is designed to hold down anti-selection against insurers by excluding any health care need or "condition" that is thought to have existed before you sign up for coverage with that carrier. It is a great "gotcha" in the insurance industry, because many times, people sign up for coverage without realizing they won't be covered for the very reason (condition) for which they are enrolling.
Have angina? Not covered.
Diabetes? Not covered.
Cancer? Not covered.
The pre-ex applies to any condition you can think of, and all those you can't. It applies to everything. But you probably won't realize this until you go in for treatment and the HMO or insurance company denies your claim. What? Yep, they simply reject your claims or send you a bill, either way, you pay. And that is for life. And nothing is worse than paying for insurance that doesn't cover anything. Which can happen. Take diabetes for example. If you are pre-exed for diabetes, then have to have treatment for loss of vision or leg injury, it will very likely be denied because of the pre-ex and the assumption that any treatment is for a diabetes "related" cause. Hence, not covered.
There are a lot of people out there that have run into this clause. It simply applies to anyone that, while not insured, acquired a healthcare condition that could possibly require treatment sometime in the future. If the condition ever requires medical care or treatment, you are on your own. It won't be covered.
The reason for this clause is to prevent people from not enrolling with an HMO or insurance plan while still healthy. If there were no pre-ex clauses, everyone would wait until they had an illness or injury and THEN decide what coverage they wanted and which doctor they wished to see about it. They would have contributed nothing financially to the insurance program and the costs for their medical treatment would not have been averaged across a large group of insured members. So the insurance companies said that while they would love to have you sign up for insurance now and start paying premiums for the coverage (or collect from your employer on your behalf, same thing), they are not going to cover medical conditions that were present before you signed up. Hence you can't wait until you are sick to start looking for insurance, because of the pre-ex clause.
It makes sense from the viewpoint of the insurance companies and HMOs, but it is still a great big "gotcha".
The "Public Option" (PO) health care plan being formed and proposed in Congress is going to fail if it is ever passed and signed into law. Here is why.
It is designed to cover those people in the U.S. that don't have any form of health care coverage now. Those people are:
a. People who can not afford any healthcare coverage but have too much money or property to be eligible for Medicaid.
b. People who have fallen into one of the many cracks in employer sponsored coverage, i.e., changing jobs, lost job, pre-existing condition, needed treatment that has been deemed "medically un-necessary" or "experimental", or something that requires long-term care, etc...
c. Healthy people that don't have employer paid coverage and don't want to pay for individual insurance. These tend to be young and want to save their money now for other expenses.
Think about this for a moment (I wish Congress would). If you can not afford healthcare now, what price can we put on the proposed "Public Option" ? That's correct...ZERO! If they can't afford healthcare, no program or proposal is going to interest them if it costs money, because they can't pay now. They might try to do something goofy like they do with Medicare, which is to have a small cost (or "premium" in the industry lingo) paid for by the covered person, but that will actually keep some of the healthy people from signing up, yes, even $25-50 per month. So if they want to cover everyone, the net cost to the recipient will almost have to be nothing, it will have to be free.
But what about the ones who "can't" get coverage because they have health needs and are excluded by one of the insurance companies exclusions (and there are many)? They would certainly be willing to pay something, pretty much whatever they can afford, for the chance to get coverage and have someone else, anyone else, assume the financial burden of paying those bills. They will be rushing as fast as they can to sign up for the PO if it doesn't exclude them. Price be damned. Let someone else pay for my daughter's cystic fibrosis, my prostate cancer, my wife's kidney transplant, my son's mental illness.
I don't know how many of the 40-50 million uninsured people can afford to pay for insurance but can't get it and how many simply don't want to pay for it. Pretty much everyone falls into one of the two situations. "Want it" being the variable, everyone wants it if it is free, fewer want it if it costs them money. But that is the conundrum Congress faces right now with the PO: Do we charge for it? Or do we provide it free? If you have ever watched "Who wants to be a millionaire?", then you already know that large groups generally choose the correct answer collectively. By choosing what is best for them individually, they select the option that is best for them collectively as well. Hence, incredible cost selection enters into the decision to offer a PO plan.
So there you have it. No matter what form the PO takes or what benefits are included, everyone will read it over and decide if they feel that the PO offers benefits that are worth the cost to them. If so, they sign up. If not, they don't.
So does Congress offer a PO plan to people that already have coverage from employers? Particularly those that have to pay part or all of the premiums now? A good question, because if they do, then all of the 100+ million people in the U.S. will make the same decision as the uninsured. They will decide whether or not the PO is a better cost-benefit choice than their current plan. If it is, then they sign with the PO. If not, then they stay with their current program. Same question is presented to those on Medicare.
So obviously Congress can't make the PO free to everyone. Someone has to pay. How do you make it affordable to those you want to sign up and not make it attractive to those you don't? You can't.
Can you make it unavailable to those that are already insured by their employer? They say that is not the way they are going to do it. Do you make the covered benefits less attractive than Medicare? You have to if you don't want all of the retired old folks signing up.
And what about the "pre-existing conditions" clause? Do you waive that for the uninsured? What about everyone else? Why should I sign up now for even, say, $25/mo for insurance if I can wait until I am diagnosed with something expensive and THEN sign up? What stops me from saving my money now and signing up for coverage later? Uh.. nothing.
This is called "anti-selection" in the insurance industry and is what scares the insurance companies and the employers so much. They fear that a low cost, high benefit plan offered in competition with theirs will attract the younger, healthier members of their program and ultimately drive their costs up, leading to higher prices and driving more of their members to the PO plan. The result being the feared "death spiral" to insurance companies, their plans get more and more expensive, driving more and more of the better risks to the PO and ultimately costing them so much money they just shut it down and pull out of the market. This doesn't occur if the program is offered at no cost to the employee, because he would have no financial incentive to choose a cheaper plan, but it would definitely occur if it were to be offered to employers who only pay for part of the healthcare coverage now.
Congress hasn't addressed this yet. It is a tough question and difficult to structure so that the anti-selection doesn't occur. Their goal of wanting to cover the uninsured seems to be in conflict with their other goal of wanting to offer the PO to employees that already have coverage through the employer. We will see how this plays out down the road, but some compromises will definitely have to be made.
Art
I have just finished reading yet another article about healthcare and President Obama's efforts to implement change. As I read the article, which mentioned nothing about Obama's legislative efforts, it occurred to me that I didn't know what exactly people were referring to when they talk (or write) about healthcare reform. The reason I often don't know what they are referring to is a result of the speaker (or writer) not knowing what they are talking about. Seriously. I just read an article by a columnist on the Yahoo finance page about why the public is not supporting the proposed legislation for reform. The author made some good points and added a few huge misunderstandings as well. Truly, he doesn't know.
The debate usually breaks down into two sides, Republican and Democrat, rather than focus on providing healthcare. The Republican political position is that while we would like to improve the current healthcare system to be more efficient, cost less and cover more of the population, ....this is not the time to make those changes due to the current economic environment. They also feel that any change to the existing system may threaten their personal doctor-patient relationship, which they feel would be a disaster. The Democrats feel that now is the time for change, since they have control of both the White House and Congress. They also feel that coverage needs to be extended, by either offer or mandate, to everyone living in the country, citizen or not. I confess, I don't have the details of the proposal at this time. Cost be damned. President Obama has said that the additional costs for covering the additional people will be covered by raising taxes on the wealthy. We will discuss that later.
Who am I?
I spent about 15 years working in the healthcare industry, starting out as a Group Life and Health Underwriter for the largest insurance company in the U.S. and ending up as a Vice President of Underwriting for the largest HMO in the country. I am not a doctor, nor a politician. My job was to analyse risk, price the risk, price the products and manage the risk/pricing to earn a specific profit for the insurance company/HMO. I have since moved on and have not been involved in the business for almost 18 years, a lot of my knowledge is old. But I am still an underwriter at heart, I still analyse and think about issues before I decide. I wish politicians did that.
So what are the issues in the debate about healthcare?
Clearly, cost is one of them. Change always involve cost, and in this case, that cost is tax money. So taxes and reform are joined together. Coverage is another. It is universally agreed that there are millions of people wandering around the country with no coverage at all. What isn't agreed is how many, exactly, are we talking about, and how much it will cost to cover them. Then there is the age old issue of "quality of care". This is my favorite issue, because it means whatever anyone wants it to mean. To some people it means we can't change because we already have the best care possible, to others it means we must change because this country is falling behind others in quality of care and is no longer the best in the world.
Cost.
Coverage/access.
Quality.
Those appear to be the issues at the heart of the debate in Congress. They are big issues and anyone that attempts to answer or inform you of all the nuances of the issues in a single column or two is unlikely to succeed. I will try to write about them in a series of articles over the next few days. Perhaps I can at least help inform some people.
I like to listen to music. I often read reviews about a song or a group and realize I just don't care about the nonsense that people spew on blogs and paper. But I do like music. And so I thought I ought to mention five songs that I have always believed everyone should listen to at least once in awhile. They aren't necessarily my favorites, just songs that speak a message we ought to hear occasionally. No particular order:
1. Won't Get Fooled Again (The Who) It doesn't matter what political party you belong to, or whether you are a conservative or liberal, the message remains spot on....."meet the new boss, same as the old boss" The more things change, the more they stay the same. Real change takes hard work, not an election.
2. Kicks (Paul Revere and the Raiders) There are a million pro drug songs, this is one of the anti-drug songs. Old, but holds up well.
3. Cat's in the Cradle (Harry Chapin) This song only applies to parents. As soon as you have kids old enough to talk, you need to listen to this song once in a while. It's not a great song musically, I didn't enjoy listening to it when it came out and was a hit, but it flat out makes you a better parent. A must.
4. War! (What is it Good For?) (Edwin Starr) Like Kicks, this song is both old and holds up well. Call me a peacenik, anti-war, pacifist, whatever.....but this song says it simply and directly ....."War! What is it good for? Aaaaabsolutely nothing!" We have yet to solve anything by killing other people, I would have hoped that both Vietnam and Iraq would have shown people that, but I would be wrong.
5. Wonderful World ( Louis Armstrong) OK, this is one of my favorites. I have this as the last song I listen to on any tape I make, cd I burn or playlist I create. It is positive and upbeat, warm and soothing and I just like to listen to it. If I had the technical ability, I would put it on this blog for sure.
I am writing to you because I think there are a few things that need to be addressed quickly now that you are in office. You are trying to work on the economy and I assume there is a list of other projects you will tackle immediately after. That's great, but I want to mention a few ideas that perhaps your advisors haven't considered.
1. Send about $100 billion or so of that bailout fund over to Fannie Mae and Freddie Mac with instructions to start lending it out tomorrow to anyone with a home that is in default. Lend it out at 4.5% for 30 yrs, fixed, no points, no origination fees, etc. Post a few 1-800 numbers on the web and get going. We originally created Fannie and Freddie for exactly that purpose. Perhaps they could stop buying crap mortgages that someone else sold without checking credit worthiness and start issuing solid, fixed rate paper tomorrow. Tell the thousands of emplyees that work there that their new job is to answer the phone and start making new loans and refinanacing old ones until the problem is solved. Oh yeah, be prepared to put more money into this idea.
2. There, we fixed your problem with bad mortgages and shakey financing. Now lets look at the auto industry. Why are you lending or giving billions of dollars to an industry that is trying to commit suicide (see GM and Ford)? Why not take at least $1 billion and give it..... er...lend it to Tesla Motors and tell them to start pumping out the gol darned electric roadster it claims to be manufacturing. It still claims it can put one on the road, but this isn't ready, and that isn't working. Can they make the darn thing or not???? Get on this now. Give them the financing, take more than half the stock, and make them sell the dang things for about $50K. Anything more than that is a rip off and we all know it. Pollution problem fixed, check. California emission standards met, check. Gas and oil consumption reduced, check. Fun toy car available for Hollywood celebrities like Jay Leno and Tim Allen, check. Oh yeah, and if they need plants, equipment and workers to manufacture the cars? I think GM and Ford have a few extras they aren't using. If Tesla manufactured and sold as few as 100,000 the first year it would go a long way toward establishing a viable industry that could do so many things for the environment.
3. We need you to quickly begin restoring basic human rights to the citizens of this great country. The Writ of Habeus Corpus needs to be restored. The Geneva Convention standards need to be honored. Proper bench warrants for any wire taps or electronic surveillance of any sort must be obtained. Rights to fair and speedy trials need to be restored, rights to attorneys need to be restored. Let's correct the huge mistakes made with the UN patriot acts I and II.
4. Sorry to harp on this subject, but along the same lines, some rules for the appropriate use of Eminent Domain need to be implemented as well. It is rediculous that governments, whether federal, state, county or city, can come along, point to someone's property, and just take it for any purpose whatsoever. Compensation to be haggled out in court later. There are times when Eminent Domain is needed to build roads, bridges, etc...,but taking private property for the private business use of someone else is wrong and shouldn't be allowed. Allowing Costco to just take private land that the owner doesn't want to sell, or let a developer take land on which to build a shopping mall, etc.., is just wrong. Fix this too.
5. If you want to insure the uninsured in this country the best thing to do would be to extend Medicare down to age 60. Do it now. When the program has shown it can handle that age group, keep dropping the age down in reasonable increments until everyone is covered. There, national healthcare. At five year age increments every year, you could do this in about 8 years. Get it started. But you would have to address the real issue in attempting to do something for healthcare, i.e., you would have to prevent the physicians from refusing to provide treatment to patients as they do now. Best way to do that? Probably have a law that says no physician can refuse patients treatment, period. Will there be abuses of that? Of course. But right now, Medicare patients are being refused treatment simply because they are on Medicare. That simply can't be allowed either. Drop the age and force the docs to treat everyone.
That should get you started. Let me know when you've knocked these out, because I've got more if you need them.
Sincerely Yours,
Art
I doubt that anyone reading this post actually subscribes to ESPN the Magazine, but if you do, then you have seen the cover story this month about how scared the NFL players are of citizens and criminals and the extraordinary precautions they take for security. Ha...ha...ha..ha...ha!....I'm dying here. That is sooooo funny my stomach aches! Really, stop, your killing me.
This is supposedly a result of the incident last year in which Sean Taylor, a player on the Washington Redskins, was shot and killed during a burglary/robbery at this home with his girlfriend and child in the house with him. DURING THE SEASON. He was home in Miami during the bye week when several young men broke into the house and he ended up confronting them and getting shot. He died of the gunshot wounds. He had an alarm system in the house but it wasn't activated. The house had been broken into just nine days before and burgled as well.
It was an awful and tragic crime, he was a victim of black on black violence. I don't know the neighborhood but am told it wasn't the best. You have to feel sorry for him and the family that this happened. The young men that shot him did not know who he was. Again, this was terrible and unfortunate for Sean and his family.
But to associate this with paranonia over security of NFL players is laughable.
The NFL has a long and terrible history of violence against US, that's right, US. The fans, friends and relatives of NFL players have much, much more to fear from them than they do from us. Seriously, these oversized, steriod injecting criminals do far more harm than is done to them. Lets start with a body count:
NFL players killed: (2) Sean Taylor Washington Redskins
Darrent Williams Denver Broncos
NFL killers (3) victims (6): O J Simpson (2) Nicole and Ron
Rae Carruth (2) Seven months pregnant girlfriend
Ray (the knife) Lewis two hairdressers after SuperBowl
And that's only the ones I can recall off the top of my head. Should we all get state of the art home security systems if your city has an NFL team? I guess so. Rediculous!
And let's not forget the other acts of violence. These are waaay to numerous to list. NFL players routinely go out for nights of drinking, fighting, raping, theft, soliciting, etc.... There are at least two players that have been arrested the very night prior to playing in the SuperBowl.
And if you added college football to the list, there isn't enough space in the internet to list the football players and their crimes. Most of which get thrown out or dismissed, or acquited, much like O J and Ray. Dead is still dead.
These guys start by beating people up in grammer school and never stop as they go through high school, college and into the NFL. The drinking and drug use as they get older doesn't help. Few players drafted by the NFL teams have a clean rap sheet. Most have violations and arrests somewhere along the line. And they fear US? Like I said, that is patently absurd. They go looking for trouble, looking for situations that might escalate into violence. I don't and I don't think most of their fans do either.
Wake up ESPN, you are out of touch with reality. You and the NFL both need to grow up.
I am going to take down the post I put up about my son's fighting. I had a chance to talk to him and it turned out I didn't have all the facts. I knew that was a risk when I posted it, I even mentioned that the information I presented was all I knew, but it was incomplete and the parts missing were key. The first thing missing from the second hand description I heard was that our kid was not the aggressor. He punched in response to a shove, not just words, but a hand on the chest and push. Not exactly a punch, but it was designed to instigate a fight. So be it. The other information that was missing is equally important. The two guys had run across each other before on that same night and were already at the stage where they were pissing each other off. The incident wasn't rash and spontaneous, it was brewing. The fight was quick and over. I spoke to him about the dangers that exist when you get involved with an unknown someone after drinking. I haven't changed my view on fighting or bullies. I detest both. But that wasn't the case here.
I think that part of the problem I had in this case is that I want my kids to listen to what I say and avoid some of the situations that I have had to go through. I had my share of fights when I was young. And I realised as I spoke to him that my last punch throwing fight was at age 22. He is still 21. I would sure like to spare him the ordeal of learning the hard way that someone can always fight better than you think they can.
One day in April of 1993, 17 yr. old Carmen Tagliere III and a buddy were racing some friends to school in his car along the roads of Colorado. While trying to get around one vehicle, he almost ran the guy off of the road with a very deep drop off of the shoulder down to a rocky bottom some thirty feet below. Vern Smalley, the driver of the vehicle became incensed over the incident and sped up to take the lead again just as the two vehicles were approaching the freeway on ramp. Instead of getting on the freeway, Vern, 52, pulled off the road onto a turnout and waved the high school students to follow. Vern was really going to let the kid know what he thought of his driving that morning. Carmen obliged, turned off as well, parked ahead of Vern, left his passenger in the car and got out to confront Vern.
Carmen came charging back to Vern's vehicle, angry and frustrated. Vern was upset and annoyed.
When I first heard this story, I was in Colorado and knew the area, knew which high school the kid went to, knew where the other guy had worked, was familiar with most of the details. What do you think at this point? My first thought was: teenage high school students drive like idiots the world around. So what? Did Vern really think he was going to set the kid straight just by lecturing him on his poor driving habits? And what about Carmen? What was he thinking? Was he going to yell at the old guy and tell him to get off the f---ing road! cause he wanted to drive by and race his buddies? It struck me that neither party had a rational plan in place and that therefore there wasn't really a reason to pull over and engage further with each other. But they did. Couldn't Carmen have just gone on to school? Couldn't Vern just taken down the plate number and called the police and complained? Of course they could have, but they didn't.
According to his testimony, Vern pulled his loaded .357 S&W revolver out of the glove box and put it in his lap until he determined that Carmen did not have a weapon. Carmen charged up to the car and immediately began punching Vern in the face and side of the head, breaking his glasses and possibly knocking him out. Then he walked away from the car. Stopped, and returned. This time he climbed halfway into the car through the open driver's side window and began punching Vern again. Only Vern had slumped over to the right, the passenger side and for Carmen to keep hitting him, he needed to get halfway into the car. Oops. The gun went off, although Vern isn't saying if it was deliberate or not, and tore a hole in Carmen's chest through the left lung and the major artery coming from the heart. He left the car, staggered off toward his vehicle, collapsed, and died.
Now what do you think? Fault? Blame? Terrible tragedy? Hot headed kid meets vigilante Charles Bronson wannabe?
Turns out neither party was exactly a saint. Vern turned out to be a retired Air Force officer that decided to engage with the kid that day for whatever reason. The kid turned out to be an angry bully, kicked out of schools, malls and with a police record for threatening to kill other students.
Regardless, Vern was charged with 2nd degree murder, manslaughter.
My point with this story is that you never know who you are dealing with when you meet someone, some random stranger, under whatever circumstances. He could be a student in a hurry that was running late and just wanted to get to class. Vern could have been someone like me that doesn't drive around with a loaded revolver on his way to work, or shopping, or wherever he was headed.
So when my son decided to take a poke at some mouthy stranger that threw a slur toward him on Halloween, he was, in my opinion, making a huge mistake and taking an enormous risk with his life. The other guy could have easily beat the snot out of him, or had his friends do it for him. He could have pulled a knife, as happened at one of the S.F. Giants games over the summer, and stabbed him dead on the spot. Or a gun. Dead is dead, doesn't really matter how.
And here's the point I want to make to him. No matter who ends up injured or dead, the fault and legal responsibility always rests with THE ONE THAT STRIKES THE FIRST BLOW. If he wins the fight or kills the other guy, off to jail he goes, if not, then he dies and the other guy goes home.
Vern Smalley was acquited of all charges and sent home, he didn't spend a single minute in jail.
Son, defend yourself...yes. But be the aggressor and throw the first punch? NEVER.
We are coming up on the elections and everyone is busy trying to decide who to vote for President in November. That's great. But don't forget to spend some time trying to figure out who and what to vote for on the rest of the ballot. There will probably be at least a House of Representatives battle to decide, maybe a Senate seat or two as well. Then there are the various state offices that are running, maybe some county superintendents or whatever they are called where you live. If you are in a city, the city council may be up for a few seats, possibly the local school board as well. Do some research, look them up on-line and read up on the editorials in your local newspaper. In short, don't spend all of your time trying to decide who to vote for as President and then just make a wild guess for the state and local offices. These people make more of a direct impact on your daily lives than the President ever will. They are the ones who will spend large amounts of your tax dollars. They will make decisions regarding things like gay marriage and abortion, things you thought were decided on a national level. They aren't, they are local decisions, just as are school district decisions, city activities and county road maintenance. Read up and find out who best represents you.
When you are done with that, start looking through the numerous propositions and amendments. Most states have a half dozen or more that you need to vote on. Be careful, these can be tricky. Often the campaigns for a particular proposition or amendment will be grossly misleading as to what the measure is for and how it will impact you. You need to read the actual wording and think about the measure before deciding. Again, these directly impact you right there in your state, your county, your city, your school district, your fire district, etc..
And pay particular attention to how much some of these measures will increase your (and my) taxes. Often, the author of the measure tries to mislead you to believe that taxes will not be impacted or will go up less than they will. Don't be fooled, politicians will often mislead if not outright lie about such things. Figure them out for yourself. Do your homework people and......DON'T FORGET TO VOTE!!!!!
No one noticed at first. The rain just didn't fall for days, then weeks, finally months and eventually years. Dry as a bone through summer and winter. The first year was tough, crops were lost and the livestock didn't produce very well. But the second year was a disaster. No crops again, even though we tried to plant. Livestock became less and less of an asset and more and more of a liability. Tried selling the livestock, but had no luck. Eventually, had to butcher them to feed the family. By the third year, it was time to drive into town and have a talk about some help.
Farmer: "I need a crop loan to plant the wheat, Bill. About $500 ought to do it."
Banker: "George, you're ten months in arrears already and owe about $5,000. I can't extend you another loan. You haven't paid anything in months and I don't see how you're going to be able to make do with what you've got now. I'm thinking we have to foreclose if you can't give us any money against the loan."
Farmer: "You can't do that! I need more credit or I'm lost for sure. Bill, I'm counting on you to help me out here. The drought can't last forever, we need to team up and ride this out. These are tough times, but you know I will make it work. I need a crop loan!!!"
Banker: "Sorry George. I've done all I can. It's not personal, I love you and your family like my own, but the bank has gone as far as we can. If you can't pay me anything on the loan, I'm going to have to start foreclosure on the farm. You understand, don't you? We can't carry you any further."
Farmer: "I understand. I understand I came here today to ask for help and you kicked me in the nuts. If you can't help me, I guess I'll just have to find someone that can."
So the farmer left and went back to his farm and started calling on other bankers and friends trying to find someone that could loan him enough money to plant the crop, pay the loan, feed his family and make it through the drought. But no one was in a position to help others any longer, having been tapped out the years before by those that failed earlier. So the farmer went bust.
The bank foreclosed on the farm, took posession and promptly put it up for sale. Only no one wanted to buy it because the other farms had suffered a similar fate and all of them were up for sale at staggeringly low prices. But still there were no takers. And no one wanted to rent the farm and farm it because the drought continued and there were no crop loans made. Credit had disappeared. The farm, like its neighbors, was abandoned. And, inevitably,the bank became loaded with unsold, unrented, non-producing property. Property that the bank now had to pay property taxes on as the owner, had to pay people to repair, mow lawns, paint and maintain. Property that had eaten thousands of dollars of the banks cash. Cash that could no longer be loaned out to borrowers. Cash that had to be given back to depositors that suddenly wanted to withdraw their accounts. The bank runs had begun. The bank couldn't operate anymore, couldn't pay for their investments, couldn't pay the tellers and loan officers, or even the execs. The banks began to close their doors and fail. The panic spread to non-farm banks, to the bigger and bigger cities until the entire nation was in a panic. Unemployment rose and the recession began.
Meanwhile, lack of rain meant lack of crops. Lack of crops meant scarce food. Scarce food meant higher prices. Higher prices meant inflation. Inflation meant the government had to raise interest rates and tighten credit. Tighter credit during a recession kicked the whole thing into a Great Depression. It was 1929.
Sound familiar? See the similarities? The differences?
Folks, I know this is going to sound crazy, but the worst thing you can do is nothing. You can't sit on your money and make things worse. Keep it safe, yes. Do nothing, no. If you need to buy a car, buy a car. Shop around and find a good deal and buy a car you can afford. There are terrific deals out there for all kinds of things people use and need every day. Find them and buy them. We need to spend money on consumer goods and get the economy back on track. Yes, even cars, boats, houses and financial investments. If you need something, research and find a good deal and BUY it. Don't wait for 'things to turn around', the turn is never noticeable. Once the prices have hit bottom, they will reverse and go up. And with interest rates this low, the money has to go somewhere. Once it was real estate, then oil, now.....???? Who knows? The point is, when prices are low, it is time to buy. Buy prudently, research thoroughly, but buy. In about 3 years, you will look back on this time and say "Man, I could have bought that car for half of what they cost now. Why didn't I buy it then?"
The stock and bond markets are pretty suspect right now, only buy what you can afford to keep for years as an investment. Same with real estate, there is no hurry to buying a property unless you need a place to sleep tonight. But consumer goods? Furniture, appliances, clothes, etc.... go ahead and buy what you can afford.
And don't forget to vote!
