Friday, January 8, 2010

The Future is Bleak

The economic future in America is at best bleak. Obama, his cronies, and Democrats in power lost sight of the ball and America is on the cusp of economic failure. For months the public has been fed the line the recession is over and the economy is growing. This spring there were "green shoots" of new growth. This summer the public at large was informed the economy was growing again. This holiday season we were fed the retail sales were better than expected. Yet the unemployment numbers keep getting worse.

The only reason the unemployment did not increase is because another 661,000 Americans left the workforce. They didn't leave the workforce voluntarily, the left the workforce because there are no jobs. Another 85,000 jobs were lost in DEC. While the Obama water carriers and attempting to spin this as a sign the economy is improving, the bottom line is the "jobs" market is still in decline. It doesn't matter that last year we were losing over 600,000 jobs a month and now we are "only losing" 85,000 a month. Nothing has changed the economy is still shedding jobs.

The economy is bleak for two reasons. First the Obama and the Democrats took their eye off the ball. Obama jumped in right away and demanded a trillion dollar stimulus package. The Democrats in Congress complied and developed a stimulus package that was filled with pet pork projects with no ability to save or create meaningful and lasting jobs. Instead the trillion dollars was wasteful spending that did nothing to curtail the economic downturn. The Democrats are still out there claiming we haven't spent enough to get out of the downturn. Paul Krugman is out there claiming the stimulus was too small and more government spending would be the cure. The problem is this throwing away a trillion dollars on pork projects did nothing. I'm not sure how much the American government has spent to bail the economy out but I can assure you it is astronomical. The fed printed more money. There was the original Bush stimulus. There was the TARP. There was the Obama stimulus. The government has spent trillions upon trillions to rescue the economy. Does anyone really believe another trillion dollars is going to yield different results? The stimulus packages are the definition of insanity, just as doing the same thing again and again expecting a different result. No my friends the economy will not be able to recover by spending on wasteful pet projects. The democrats should have focus their attention on the economy rather than waste our time with a health reform debate that the country does not want and cannot afford. Which leads me to the second reason the economy will not recover anytime soon.

Has anyone noticed the price of gasoline? The average price at the pump is $2.665. The average pump price is $.98 higher than a year ago which is over a 60 percent increase from a year ago. While the so called economists would love to have everyone believe this economic downturn is due to the financial trouble caused by the mortgage crisis they ignore that the price of oil is as much to blame as the mortgage defaults. The downturn picked up a head of steam in the summer of 2008 when the price of gasoline skyrocketed to over $4.00 per gallon. This coincided with the spike in unemployment. The price of oil will be the downfall of this economy and will be the factor that creates either a double dip recession/depression or an "L" shaped economy. The dollar is getting weaker as Obama and the Fed spend and print more money than the market can afford. Even if the economy turned up there will be a corresponding increase in the price of gasoline as demand increases. Many expect the price of gasoline to approach three dollars a gallon. Businesses in the commercial sector are having problems paying bills now, higher gas prices in all likelihood will fore even more commercial bankruptcies.

The economic future in America is indeed bleak. Obama and the democrats in Congress have lost sight of what will make the economy grow. Obama threw a trillion dollars at the economy and moved on to health care instead of energy. Energy is the unspoken of straw that broke the economies back, yet the democrats are paying no attention to the rising costs. Instead they focus on a ruinous health care bill that will sap even more life out of the economy. Until Obama realizes that wasteful spending is not the answer. Let me give you a plan that would save America: Cut corporate taxes on businesses that produce energy within our shores. Allow companies to drill our oil. Allow companies incentives for extracting oil from shale. Incentivize companies to produce nuclear energy. Focus on creating jobs in the energy industry and the economy will explore and provide Obama and the Democrats the opportunity to diminish our reliance on foreign oil, promote new energy technologies, and save the economy. Until the government understands the problem in the economy will persist until energy costs are reduced and jobs are created.

1 comment:

Anonymous said...

I suppose the government could REDUCE the taxes on gasoline! Everybody is mad because oil companies are making money, while the government pockets more money than anybody from each gallon of gasolione sold. It's obscene!