If you follow the stock market at all, you might sense that something is beginning to go wrong. Or, if you make weekly trips to the grocery store...., or if you are trying to sell your house, or are involved in any number of normal activities.
The Dow is off a thousand points from August, and things are NOT picking up. Just off the top of our heads, we can think of a couple other issues that will continue to make for a weaker economy in 2008:
The current credit contraction is bad, and getting worse.
The collapse of the financial sector (Merrill Lynch just wrote off 15 BILLION in bad debt this a.m)
Two "market corrections" in the last six months
The dollar has declined to an all-time low against international currencies
Oil is at $100 or thereabouts ($94.59 as I post this)
Gasoline is over $3
Unemployment at 5% and rising
Food prices are at all-time highs, and rising
The national debt is over $9 trillion, It rises One Million dollars every 47 seconds, and that rate is accelerating
We have as a nation over $47 trillion more in unfunded entitlement programs
Social Security (what a name!!) will be busted at current spending levels in less than 15 years
....... Just for starters.
Our "conservative" president has gone back to the supply siders' basic argument, which is that the "Laffer curve" has no limits to which it can be pushed. He wants to cut taxes. From his last speech: "....it seems like Congress ought to be sending a message that we're not going to raise your taxes in the next three years by making the tax cuts permanent."
The idea behind tax cuts is a good one. Idiots have screeched that the tax cuts are for the "rich." My question is, who else can you cut taxes FOR? The poor in this country pay no appreciable income taxes. Arguing against a tax cut because it discriminates against the poor is a fool's argument. That is not the problem. It is the "rich" who start businesses, create jobs, and create wealth for the "oppressed poor." The trouble with the tax cuts in the USA nowadays is that they are NEVER offset by spending cuts, not that they put more money in the hands of the "rich." Ideally, tax cuts should be linked to the choking the REAL problem, which is the growth of government. Unfortunately, we have married tax cuts to the idea of deficit spending ("deficits don't matter" --Dick Cheney).
We have used the fiscal stupidity of collectivists to cut our own throat. Leftists, blinded by class hatred, argued that cutting tax rates reduces government revenue. This is nonsense. The "Laffer curve" is the theory that reductions in marginal tax rates (the higher rates the rich pay) produces GROWTH in federal revenue and not reduction. This is a good argument for reducing the tax rates of the rich. We actually get MORE of their money by taking a lower percentage of it. Leftists don't like it because they view taxes as a mechanism for punishing the rich and making sure they don't keep "too much" money (whatever that is). If we view taxes as a mechanism to raise revenue, rather than some halfwitted tool for social engineering, then cutting the tax rates for the "rich" makes perfect sense. Yeah, ok. Hooray for Rush Limbaugh and all that.
However,. the present bunch of leaders have taken the benefits of tax cuts (money in the hands of the people), which in fact produces more revenue, and failed to even take a passing glance at the necessary flip side of fiscal responsibility, which is restraint in government spending.
The congressional budget office released their report Monday, and the one thing you can be sure of is happening. Federal spending keeps rising by the billions. Our debt is also rising at the rate (checked yesterday a.m.) of approximately one million dollars every 47 seconds, and this rate is rising.
$Loading... = the
National Debt
This is just plain immoral. It is selling out our children for the feelgood present. My generation, the baby boomers, has to be the most selfish, self-absorbed generation in our nation's history.
The effects of our orgy of spending on our failing "empire" and the incredibly stupid attempts to address social programs/policy from a federal level will finally come home to roost (we are seeing the beginnings of it now), Ironically, it will be as the boomers (my generation) are entering the period of greatest need coupled with our time of least power. Do not be surprised if the youngsters decide we just aren't worth the trouble and refuse to shoulder the lion's share of the debt, which is the 47 TRILLION dollars in unfunded Social Security obligations we have racked up.
"Sorry pop, I hate it about that heart valve. I am flat broke. Billy needs surgery to correct his _______ and you know, he has a FUTURE. Yeah, I know you really need it but, ya know.... YOU SPENT IT ALL!"
Wouldn't that be cosmic irony?
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