fixing the US economy requires a good hard look at what is going on. The first thing that needs to be seen is that the parameters of the game have changed, and therefore the old fix will no longer work. But when you listen to the Republican party, it seems they have not noticed that the fix they want is actually now toxic because things have evolved.
This will be a true test of the intelligence of politicians. Unfortunately should they fail that test, it is the Americans that will suffer a return to deeper despair. People need to realize it is not only the US that is having a problem, it is most of the planet. So to say President Obama’s plans do not work, is also saying that about all the other countries in the same situation.
It is not difficult to point out examples of why going back to the old republican ways will not work. The price of oil and the increased population are just 2 examples that are in your face. To bringing back the old, is exactly like tossing your computer printer for a typewriter and other 1990 technology. Simply the technology of economic recovery must change to something new, and not something old.
For many Americans this upcoming 2011-2012 political cycle will be scarey. There will be a lot of deadlocked bills again, and nothing will get done. It is clear the politicians have not got the message, and even the new freshmen Congressmen and Senators will discover that their voices get lost in the choir that resembles the grunting sounds heard in a Rugby game.
For what it is worth, even writing about this churns the stomach because this prediction is not hard to make. That being things will get far worse before they get better, and only when there is no other option will they finally make the right choices. If that sounds like a description of someone bottoming out in the gutter before they make the right choices, you would be absolutely right.
What are you talking about Richard?
The root problem with the economy is the overhang of bad debt and growing national debts that cannot be repaid. When you are already drowning in debt providing more loans by the IMF or ECB or Federal Reserve will not help.
There is no way we can earn our way out of the debt. The answer lies in defaulting and allowing the bondholders to take a haircut in settling on a more manageable debt level.
That would mean putting the banks into receivership. There would be a panic and flight to cash, the stock markets would crash and the the cost of interest will go up.
It will be painful in the short term but at least it will guarantee a bottom.
What Obama and his gang are doing is trying to keep the game going by borrowing more. This approach will make things more painful down the road as what cannot be paid back will not. Obama has done nothing more than continue Bush’s policies of extend and pretend. He also does not care about personal civil liberties as can be observed with his indifference to stop the lack of privacy measures taking place by the TSA.
Why you put Obama on a pedestal while vilifying Bush defies all logic and I wonder why the dots haven’t been connected on this topic!