Financial Resources: Help or Hazard (My first paper for school)

Introduction

This paper will argue that there should be better policies in place when it comes to government funding. The purpose is to give the reader a satisfactory understanding of how the constant bailouts of corporate business/banks with public funding, is causing an inability to generate a resilience on the nation’s debt and how it has caused the nation to be in a deep recession. The growing need for different social services programs, such as non-profits and, other governmental funded programs has risen, and the need for monetary support is now greater than what is has been in 10 years.
With that in mind, poverty in the United States is roughly 13% greater than 2007. The most common measure in poverty in the United States is the “Poverty Threshold”, which is set by the government census polls (Congressional Digest Sept.09). Most Americans are in “relative poverty” which describes how income relates to the median income and does not imply that the person is lacking anything. (Layman’s terms: living check to check) In 2008, University of New Hampshire did a study on average rates of poverty; it is persistently higher in rural areas and inner cities, as compared in suburban areas.



Where in the urban/ inner city areas the various social services programs are more readily available:
-Non-profits
-Churches that provide monetary support and other services
-Social Security
-MFIP
-GA Grants

In today’s economy, the need for social services has risen; some of the areas that are in greater need of financial assistance are rent/mortgage, utility bills, transportation, clothes for job searching, furniture and even funeral expenses. The problem many non-profits face is financial stability. The need is there, but the availability of resources is not. What makes it so difficult to swallow is that there are individuals that misuse or abuse these programs, making it difficult for the families or individuals that need the assistance to receive it. (M.J. Copeland 2009)
The Non-profit Finances Fund gave 986 nonprofits a survey, which included “lifeline organizations” (programs that many depend on for monetary or other support) of these organizations, 16% expect to cover their operating expenses, 52% anticipate this recession will have long term to permanent effects on the organizations. (Author Unknown 2009) These are important details since the chronic failure of the economy citizen’s needs exceed the availability of resources available. In such situations, the persons in need will not be able to receive the support they are asking for.
Financial Responsibility to all Persons
Identifying this makes it more difficult to comprehend, knowing that the governments gave $787 billion in a “Rescue Bill,” to calm stock markets and unfreeze credit, which came from mounting fear of a deep recession and following the collapse of Lehman Brothers and Washington Mutual. (Billiteri, T 2009) When the government started to regain control of the market, they bailed out various companies, automotive and banks; which in-turn will make Generation X responsible for the remuneration; and not able to retire until they are in their seventies.
With the claim of unemployment at an 8% rise, how are CEO’s of these bailed out companies still receiving $18 trillion in bonuses? Citibank (NYSE-C-news-People 09) whom also was bailed out spent $50 million on a luxury jet. “Galling as this all is, what is more troubling is the excuses for this behavior we have repeatedly heard from many others in power elite especially over the Wall Street bonuses scandal.” (Gerstein, G 02/09) If public administration would have a stricter process in which they provided monetary support to all, our country would be in a better position.
The constant bailouts and misuse of public funding will continue to decrease our current dollar. Companies should not be allowed to use company aircrafts unless there are more than ten persons traveling in the same direction. CEO’s, CFO’s and COO’s should maintain a public portfolio of all financial decisions and spending. Such issues have declined the dollar amount in which we used to so proudly display. Thinking that the dollar is only a piece of paper instead of the building block of the economy, has our country significantly in debt.
Picking up the Pieces
State government is behind the majority of the economy by a good six to 18 months the jobs inside the state will still be laying off. (E. Smith 2010) “It has been a catastrophic year for businesses, well beyond the evident destruction in shareholder value and need for emergency government funding” ( Elderman 2010) none of the rescue bill has been given to nonprofits or other programs that provide aid to individuals whom are actually in need. Which has made these programs turn away families and individuals; however, CEO’s of bailed out companies are living life of luxury, corporate parties and lavish living.(Billiteri, T 08)
This is not the only time with the markets instability; large companies have not changed their practices and, continue to live the lifestyle they have created. “Such emotions have been wide spread in the wake of the nation’s—and perhaps the world’s—worst financial crisis, since the “Great Depression”, but agreements on root causes and likely outcome if the crisis has been harder to find.” (Billiteri, T 08) Corporate giants misappropriate funding by having consumer’s foot-the-bill for cost of private jets, travel expenses and fine dining. Xcel Energy for example is the sole proprietor of electrical services in Minneapolis, Minnesota have been cited in several questionable debates about whether their spending can be justified and who should be footing-the-cost for their lavish ways.
Xcel Energy defends their use of private jets ($1200 a trip) exquisite hotel stays ($849 a night) and fine dining ($814 one bill). “That is was planning to stick it to the customers with a good chunk of the bills as it asked for a $132 million electricity rate hike, which suggests its’ leadership is shockingly out of touch with the tough times in the region the utilities serves.” (Star Tribune 2009) This is not including the Ponzi scheme that Minnesota faced last year with Tom Petter’s pyramid investment fraud of $3.65 million.
In learning these things, the federal government has continued to make the rich, richer and the poor, poorer. Trying to climb out of out of the nations’ debt has proven to be more difficult for those who do not have the means; surviving only week-to-week.
Conclusion
While investigating questions like where the money is going; it was difficult to find the answers I was seeking. Not knowing how deep the recession is going to get, currently it is being compared to the “Great Depression,” has to be very difficult for anyone to comprehend. While finding the sources that had the same questions as the writer, I have found that the laws are not as they intended them to be. Questions that I would like to see answered are; Why not let the markets crash and rebuild, instead of bailing out? They made their beds; they should have to sleep in it. So what, if new automobiles are not produced for a year or two, or banks cannot give new loans until the old ones are repaid; it would be better than printing money that does not exist?
The government has proven repeatedly that the lower class and now even middle class are not very important. We down here, are the ones that make you rich? Would it not make more sense to make sure our needs are met, and then in turn yours can be! Opening the job market with entry-level experiences will allow those with experience to move up in the company and slowly rebuild the economy.
In closing, government funding has its share of lapses, and misappropriations. “Survey’s confirm that its’ going to be harder to rebuild our economies because no institution has captured the trust; that business has lost-trust, is not a zero sum game. Businesses must recast its’ role in society and move beyond simply generating return on investment to its shareholders. It must partner with government and other institutions to assume societal responsibilities.” (D. Gerstein & R. Elderman 02/09) Reinventing how America does things will not only make our economy stronger, but will allow us to make the proper changes to stop the repeat cycle of recessions and depressions. History has continually repeated its self over the centuries, it is time to finally put a stop to it, and make it stronger as our ancestors intended it to be.