Slow Poison – Obama agenda killing recovery

August 2, 2010 15:49

How do you keep an economy from digging itself out of a major recession? One surefire method is massively expanding a government whose major programs are already on their way to bankruptcy, then sitting idly by as major tax increases arrive.

IBD Editorials

The Democratic Congress has spent a trillion dollars on a failed Keynesian stimulus that promised millions of jobs that never materialized. They added a massive new entitlement in the form of a government takeover of health care when the entitlements already burdening us are going broke. And they are letting the Bush tax cuts expire at the end of this year.

Why in such a chancy economic environment would investors invest? Why would entrepreneurs take risks? And why would businesses expand and hire new employees? By extension, why would consumers spend?

The normally cautious Conference Board reacted to the tepid second quarter figure by warning that “The post-recession rebound is history.” And its forecast was for GDP to “slow even more markedly, to a 1.6% annualized rate in the second half of the year.”

The tepid new 2.4% figure follows 3.7% GDP growth in the first quarter of 2010, and 5% growth in last year’s fourth quarter.

But the Associated Press’s quarterly survey of 42 private, corporate and academic economists, released just last week, finds the numbers crunchers worried on a number of fronts.

The lack of jobs and sinking real estate values mean people are saving for a rainy day, not spending, with one measure of savings hitting its highest level in over a decade.

Also, a majority of the economists don’t expect unemployment to fall back down to the historically typical 5% level until 2015 or later.


Help Make A Difference By Sharing These Articles On Facebook, Twitter And Elsewhere:

Interested In Further Reading? Click Here