Currently there are 6 million people who are at risk of losing their unemployment benefits. Members of congress still haven’t come up with a solution to whether or not they are going to continue with this aid that so many have become dependent on as the economy has significantly contracted.

Unemployment USA

It is clear to CrushTheStreet.com that to fundamentally fix situations, the government needs to get out of the market and stop distorting the economy so people can go back to enjoying a higher standard of living. This essentially means that we don’t support any further extensions to the unemployment insurance because pain now, will yield long-term benefits to the hard working Americans who are struggling to find work at the moment. Like we’ve stated time and time again, there are always unintended consequences every time government puts their fingerprints into the free market.

How does unemployment fit in? Well let us show you, each time someone loses their job and gets on unemployment, a wage floor automatically goes into effect. Not many people who are receiving 400 dollars a week to search for jobs and sustain themselves and/or their family will even consider taking a job that pays under that, exactly that, or even a job that might be slightly above that because the safety net of not having to work keeps people from accepting jobs that they could get immediately. The only motivating factor of the unemployment insurance policy was that it eventually ran out and for the last couple years, people have been able to comfortably rely on an extended time table for their unemployment benefits. Again, the unintended consequences is that this action keeps people out of the market and really discourages them from going back to work. The initial shock for people that lose their benefits will be devastating and lifestyles will have to change, but the long-term success of this nation relies on a decoupling of government in our daily lives in many more areas than just unemployment.

Just a side note…  

 

Seeing people hurting and wanting to help should come from individuals and private organizations that don’t steal money from people to redistribute, but accept and earn money to help people in need. Private groups and individual compassion are going to be a huge helping factor in the coming years to assist those who are struggling with the downturn in the markets. Looking for government assistance will only drain the economy more and create inefficient systems that will waste more money than provide good. 

 

Back On Track 

 

Did we ever mention that taxes are a way for the government to control its people? Well some members in government want to extend the payroll tax cut and others don’t. Since payroll and income taxes are clearly a redistribution of wealth and a burden on the free market, we don’t support them, but extending cuts in taxes for people who would otherwise have to pay them is a step in the right direction. The notion from Obama is that he doesn’t think that letting the individuals who earn their money actually keep it will spur growth in the economy. The real question is why should Americans have to surrender their tax dollars to the government as if them giving Americans a tax break was an experiment that needed to be tried to see if people could hold on to their own money and be responsible with it? Guess not, time to keep it for ourselves. Well we already know what happens when we let the government control finances.   

 

As for some news for the day…

 

Federal Reserve 

 

Today we heard some news from the FOMC and as always, we’re not too surprised at their ever so optimistic forecasts and reportings. The grass is always greener when it comes from the Federal Reserve. As in November, the statement noted the “significant downside risks to the economic outlook,” but also mentioned “strains in global financial markets” as the primary source of these downside risks. It really must be nice to deflect all problems and issues that the U.S. economy is having and blame it on the rest of the world. We’ve seen this as time goes on and major news continues to come from Europe. As in November, the Committee anticipates that moderate economic growth will make for a slow decline in the unemployment rate and that inflation will also trend lower and “settle…at levels at or below those consistent with the Committee’s dual mandate.” The Fed seems to be pretty proud of themselves about this. CrushTheStreet.com could not be more proud that the Federal Reserve attempting to fulfilling their mandate. It sort of reminds us of a man patting himself on the back for making his child support payments. As long as he keeps those checks coming, he’s doing what he’s expected to do… Actually, in our opinion, the Federal Reserve is just bad news all together and there really is little to no positive spin to put on them. 

 

The QE addicts on Wall Street were disappointed that the Fed didn’t announce any further stimulus at this time and stocks came down later in the trading day.  

Watching the day to day trades in the stock market really never can be predictable and being able to guess whether the market is going to go up or down with global news sometimes becomes a traders’ nightmare, or maybe for some a 6 number winning lottery ticket. Many times the market responds when economists’ forecasts are met. The problem with this is that just because a forecast is put on paper and the market does exactly that, it doesn’t mean that there are positive results. But like in anything, when you over promise and under deliver, the recipient feels much more cheated than when you under promise and over deliver. It becomes all about sentiment and market emotions. 

Allowing the overall sentiment in the market dictate trades can be a very rough way to make decisions.

 

We like to review companies that are in the right sectors and have business models that will potentially thrive regardless of what is going on in the market.

 
“They don’t want the whole pie,” she told the women. “There are some who do, but most Americans feel blessed just being able to thrive a little bit. But that is becoming even more out of reach. If we don’t wake up as a nation with a new kind of leadership, for how we want this country to work, then we won’t get universal health care. The truth is, in order to get things like universal health care and a revamped education system, then someone is going to have to give up a piece of their pie so that someone else can have more.”
– Michelle Obama
 
Don’t you want to give up that pie?! 


 

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