How to Thaw the Frozen Economy…

February 26, 2009 · Print This Article

Here’s how to thaw the freeze?

It is true, the real estate market in Charlotte, North Carolina is similar to the rest of the country… It is slow. I continue to preach that there is not a credit freeze or a real estate freeze so, why is the real estate market so slow?

Confidence Freeze

That’s the problem! The real FREEZE is in consumers confidence! The general population is concerned about the stability of their income. Without income everything screeches to a stop! So, why would anyone purchase a big-ticket item such as a house, car or boat while they are concerned that they may lose their income. The answer is… they won’t!

So, what will make the market start moving again? It’s simple, buyers and sellers who are confident in the stability of their income. DON’T STOP READING NOW… THERE’S MORE TO IT. While that may sound simplistic, it’s true. This begs the next question, how do we get more confident buyers and sellers so the market will pick up?

Step 1: Spill the candy!
All the incentives in the world won’t make a difference to a person who’s not confident. However, it’s nice to have the “candy” (incentives) spread out on the floor enticing prospective buyers to take it. This has now been done in the form of government offered first-time buyer incentives and lower mortgage interest rates.

Step 2: Create Real Jobs
Shore up the consumers confidence in their income. Long-term government contracts for jobs that include blue collar and white collar jobs will help. If the government does implement more contracts to build/fix the infrastructure of the country this could do the trick. Building new schools and bridges throughout the country or repairing those in need will improve the country. This will provide jobs that people will believe in only if the plan is a long-term commitment.

Step 3: Get It Voluntarily Paid For!
We have to stop counting on the “Government” to pay for everything! The “Government” DOESN’T HAVE ANY MONEY! Americans must remember that the government takes our money to pay for everything it does! So, instead of continuing to take our money how about Asking For Our Money?!! Why would anyone give the government money? Because they want something back… perhaps a return on investment! The current state of this countries stock markets is a perfect situation for the government to really shine!!! Imagine if the U.S. government issued bonds that guaranteed a return of 6% - 7%. I believe that they would be snatched up by people like me who would take the hit on my stocks to get that money into a vehicle that can make me some money! Heck, I’d buy them even if they only gave a 4%-5% return at this point! The money from these bonds would be a great way to fund the governments investment in America. Remember, the “government” gets it’s money from “the people of The United States” so this would be the people of The United States investment in America and in themselves!

So… What do you think???

Written by Mark Ramsey