The three basic economic systems: goverment, producer, consumer

This economy is dead until the consumer again begins to spend. They are fully 2/3 of the economy and they are not opening their wallets. Before consumers revive, government has do all the job to save the producers. Producers keep people employed.

Whatever gave “progressive” intellectuals the idea that government could run an economy? History is littered with government failures:

Franklin D. Roosevelt (initials FDR) didn’t know what to do about the Great Depression he inherited from Herbert Hoover, so he tried everything. He hiked taxes, spent more money, established monopolies, enforced cartels, filed antitrust lawsuits, promoted compulsory unionism, multiplied business regulations, denounced investors, and started welfare programs, public works projects, a big entitlement, on and on.

One theme runs through such misguided policies: the failure to focus single-mindedly on the recovery of the private sector that pays all the bills, including tax bills. FDR was very much a creature of the “progressive” era, when many intellectuals embraced the view that experts could make a better world if only they had enough power. Some of FDR’s New Dealers were impressed by Mussolini’s fascist corporate state model, others liked Stalin’s centralized economic planning in the Soviet Union, and still others just seemed to believe that any problem could be fixed by issuing more laws and regulations. With very few exceptions, New Deal discussions weren’t about helping the private sector recover. Discussions were about making government bigger.

The influential newspaper columnist Walter Lippmann observed that New Deal reformers would “rather not have recovery if the revival of private initiative means a resumption of private control in the management of corporate business.”

As long as jobs are being lost people will hold off buying the washing machine, TV, car or whatever. Unless and until this trend is reversed we sink lower and lower. Then, because all the TRILLIONS in debt we have incurred because of this Administration have to be repaid, taxes MUST be raised and raised not just on the “rich”. Hold onto your wallet my friend because Hussein coming for your money and when he does we go right back to recession because the less money you have to spend the less reason for businesses to manufacture or import goods and the less need for workers meaning the cycle begins again.

Only one way out of the mess, Cut Corporate taxes to be at least in line with what the rest of the industrialized world is paying (currently our corp tax rate is among the highest if not THE highest). Keep in mind Corporations actually NEVER themselves pay a dime in taxes, they merely pass it along to the customer who then pays more then they would otherwise pay for the product they buy. Then we need to drastically cut the personal tax burden to put more cash in all taxpayers pockets. The more cash they have the more they spend and the faster the economy turns around.

The market may very well hit 9000 or even higher but it will retest the lows and blow right through them. Why? because the markets move on EARNINGS and the ink is red as far as they eye can see. The nonsensical spin the media is attempting to put on this pig of an economy by trying to claim because earnings dropped less then some arbitrary amount decided on by an “expert”, is laughable at best and dangerous at worst to the uninitiated investors who believe everything they hear.

Related Posts:

• Here’s a few words from Wikipedia about recessions:
• All time historic highs for % of population on food stamps.
• Sign of bad economy: December consumer spending data is worse than expected.
• I own a business. I see first hand what the recession has done to people’s spending habits.
• The Second Leg Down of This Great Recession Could Be Worse Than 1930s.

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