The BP-Induced Economic Hangover
President Obama made promises last night on behalf of the federal government for which there is no present money to fulfill. Millions of gulf coast residents will be expecting billions of dollars to flow their way and not just from BP. Indeed, I will not be surprised if BP is forced into bankruptcy and/or becomes a takeover target.
One message from the President that I wholeheartedly agree with is making a full-bore assault on our oil dependence. We cannot call the shots on our own foreign policy because of where we must obtain our oil.
At a minimum, the BP disaster may induce and sustain a hangover for our economy. Our recovery will continue to be painful if not delayed.
More economic shoes have yet to fall, unrelated to BP. Major municipalities are considering bankruptcy to shed themselves of underfunded promises made to retirees. San Diego May Use Bankruptcy to Roll Back Benefits This could create a domino effect, with local government pension failures becoming a federal pension guarantee problem. At the state level, California and New York are still struggling to find a path to solvency, a path from which their stupid politicians deviated years ago.
Random Mr. ToughMoneyLove advice to readers: (1) Start your tax planning now; (2) Downsize your personal economy to build reserves; (3) Sell your BP stock for whatever you can get for it, before news of today’s BP-White House summit is released; (4) Vote with your personal economic future in mind; (5) If (4) doesn’t succeed, vote with a moving van and find a state and city where government finances are managed responsibly.
I’m determined to not let these continued events disrupt our family’s economic future. What about you?