Obama’s plan is trickle-up economics.
By Daniel at 25 December, 2008, 3:08 pm
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Obama’s plan is trickle-up economics. Create a huge government infrastructure spending bill (similar to the WPA during the depression) in hopes that it will stimulate job growth however, the blue state jobs that will be created will go to half, if not more, of the 30 million illegal alien population which in turn will send most of there wages home.
This will occur regardless if they get amnesty. Most illegal aliens are only here for the low paying jobs and to build up there families wealth abroad. U.S. wages are higher than they can achieve at home. It is what it is and until the U.S. population including the people in the blue states excepts a lower wage with no benefits I don’t see jobs being created anytime soon. The blue states, along with a few red states got in bed with the illegal alien, now they have to compete with them for jobs and I doubt Obama will require a background check to see if they are in this country illegally. The democrats do not want to anger a major special interest group that helped them gain power.
The reality is a good portion of foreign capital that was in this country has left which is reflected in the markets. The surviving capital is seeking tax shelters and/or leaving the markets to avoid capital gains taxes that Obama has promised this nation. For the most part, I see the capital investment in the markets bottom around January 1. Most of the investors seeking shelters will be gone by then (maybe even the shorts). Clinton demonstrated how taxes can be retroactive to the first of the year. That’s not to say a definitive bottom will have been created, the low investment volume along with domestic spending may drive the market down further. It’s anyone’s guess.
Without capital investment private sector job creation or growth will be flat lined. If you make money, Obama tax plan will punish you. Today’s wealth will sit on the sidelines until the politicians capitulate. They will capitulate when there political careers are on the line. Politicians are self serving just like the capitalist investor however, the investor has the ace up their sleeve and can keep their money on the side lines. No investment = very little job growth.
I have to predict that most of Obama’s campaign promises will never see the light of day. If they do, I suspect that the economy will be stagnate for years to come. This is not to say McCain’s plan would be any better. Times have changed and the people just better get used to low paying jobs and live within their means. Until the U.S. wage lowers, I see jobs continue to leave this country. I hate to be negative but this country may never again live up to be the economic power house it once was. This rapid deflation adjustment we are witnessing may just be a start. Again it’s anyone’s guess.
We have only seen a small portion of these bubbles burst. With the rise in unemployment I believe there is more to come. Credit card issuers will be the next to see their bubble burst having to write off the soon to be historically high personal bankruptcies. This will be the destruction of personal wealth which will lower or re-adjust peoples standard of living and contribute to the economic deflation that is occurring. I am not sure what if anything the government can do to prevent this. Trickle-up economic growth will take time and not be as successful as the politicians think. If bankruptcies climb, car loans, house loans, etc. will be difficult to get and those industries like the auto makers will be destroyed. Housing prices will continue to drop if you can’t sell a house. Those who bought home years ago and think they are safe may not be. Again anyone’s guess.
I can’t predict the future but I believe we may be entering a vicious cycle. When will it stop?, it’s anyone’s guess. I do hope I am wrong but I don’t see things turning around anytime soon. I see them get worse.
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Hi Danial. Thanks for this post. I do understand the worry people have about this economy. You bring up some very valid points. But why pick illegal aliens as part of the problem? More then a million illegals have left or been deported by the US government. The economic downturn has effected these people, too. It seems strange to me that you would pick this as a way of picking apart a plan that is just in it’s planning stages. Your forecasting with out looking at all the facts. Your predicting with a political mind, instead of looking at the people. Blue and Red? What happen to just plain Americans. Although, I think your piece lacks true focus, you do bring up important points. Thank you, Tim