"Our true choice is not between tax reduction, on the one hand, and the avoidance of large federal deficits on the other." It is increasingly clear that...an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits."
"In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now."
President John F. Kennedy, in his Dec. 14, 1962 speech to the Economic Club of New York.
Showing posts with label economic recovery. Show all posts
Showing posts with label economic recovery. Show all posts
Saturday, July 16, 2011
Friday, July 8, 2011
NO REAL RECOVERY WITHOUT JOBS
I've said it before, there can be no real economic recovery without jobs. Until our government does what is necessary to help businesses create more jobs, our economy will not make any meaningful recovery. They can throw all the funny money they want towards quantitative easing, they can bailout whomever they please, but if they don't help get the people working again we're going no where fast. All you have to do is look at the latest response in the stock market to June's poor employment report to see the truth of the matter.
Yes, most people still have a job. The rate of unemployment in Missouri currently stands around 8.9%, which means 91.1% of the states workers are employed. However, when nearly 1/10th of the workforce is out of work it becomes a matter of perception. How do the other 9/10ths percieve the state of the economy, with so many unemployed and so much talk of record government deficits? When the majority of consumers believe we are living in hard times, like now, then it becomes a self fulfilling situation. If the consumer is faced with hard times, they stop spending. In a consumer driven economy this brings everything grinding to a halt. When consumers don't spend, businesses lose money and begin to down size. Down sizing leads to further unemployment creating an even more dismal view of the economy, leading to even further belt tightening by consumers until eventually things grind to a halt. Or at least slow to a dreadful pace. Instead of costly quantitative easing, huge bailouts and very unpopular health care reforms, perhaps the current administration should have considered boosting the economy by returning cash to taxpayers in the form of additional refunds. Maybe some of the people who've lost their homes could have avoided foreclosure, maybe some of the uninsured could have afforded health insurance, at the very least it would have given the economy a much needed influx of cash. Unlike bank bailouts, where the money was paid out in the form of record bonuses to bank executives while the banks themselves showed their gratitude to the U.S. taxpayers by clamping down on credit, jacking up credit card interest rates and foreclosing on homes.
It's a sad state of affairs in the U.S. right now. I'm hoping for a landslide victory for Republicans in 2012. We're not getting anywhere with the current administration so let's vote them out in the next election. "YES WE CAN!!!"
Yes, most people still have a job. The rate of unemployment in Missouri currently stands around 8.9%, which means 91.1% of the states workers are employed. However, when nearly 1/10th of the workforce is out of work it becomes a matter of perception. How do the other 9/10ths percieve the state of the economy, with so many unemployed and so much talk of record government deficits? When the majority of consumers believe we are living in hard times, like now, then it becomes a self fulfilling situation. If the consumer is faced with hard times, they stop spending. In a consumer driven economy this brings everything grinding to a halt. When consumers don't spend, businesses lose money and begin to down size. Down sizing leads to further unemployment creating an even more dismal view of the economy, leading to even further belt tightening by consumers until eventually things grind to a halt. Or at least slow to a dreadful pace. Instead of costly quantitative easing, huge bailouts and very unpopular health care reforms, perhaps the current administration should have considered boosting the economy by returning cash to taxpayers in the form of additional refunds. Maybe some of the people who've lost their homes could have avoided foreclosure, maybe some of the uninsured could have afforded health insurance, at the very least it would have given the economy a much needed influx of cash. Unlike bank bailouts, where the money was paid out in the form of record bonuses to bank executives while the banks themselves showed their gratitude to the U.S. taxpayers by clamping down on credit, jacking up credit card interest rates and foreclosing on homes.
It's a sad state of affairs in the U.S. right now. I'm hoping for a landslide victory for Republicans in 2012. We're not getting anywhere with the current administration so let's vote them out in the next election. "YES WE CAN!!!"
Tuesday, September 29, 2009
Has The Economic Stimulus Failed?
I read an article in yesterday's USA Today about a survey of corporate CEO's, who were asked if they thought the economic stimulus had succeeded. Sixty percent said they thought it had failed to have the desired affect on the economy and only 23 % said it had been a success.
I've written before that in my opinion it has been a failure. While some banks were saved, at least in the short term and the automakers and AIG got some relief, where is the overall stimulus to the economy. Infrastructure benefited, but while infrastructure is in much need of repair and updating, I doubt we'll see much job creation there. So you have banks, automakers, an insurance company and infrastructure, none of which have created jobs in any great degree. Without job creation and the resultant increased consumer spending, the stimulus package has to be considered a failure. Would we have lost more jobs and been worse off without it, maybe and maybe not.
I believe that the money would have been better spent by sending out rebates to taxpayers. If the money had been put in the hands of taxpayers, it majority would have been spent, boosting the economy by keeping the money in circulation. The banks did not keep the money in circulation, they hoarded the money, paid out bonuses and tightened consumer and business credit, worsening the economic situation. When consumers spend, retailers benefit, they keep their employees working. Manufacturers benefit by increased orders and they keep their employees working. Government benefits by increased revenue through payroll and sales taxes, so they keep their employees working. The restaurant and other hospitality industries benefit because more people are working and have more to spend on their services. When the money is given to a limited group, ie. banks, insurance, infrastructure and automakers, only the people in those industries benefit. When it is given to taxpayers who spread the money around, everyone benefits. If the government gets any of the taxpayers money back from TARP, I believe they should seriously consider sending it out in the form of tax rebates to taxpayers and maybe we'll actually see some improvement in the economy. If not, with the job market still hemorrhaging jobs and consumer spending down, I believe we're looking at a slow and drawn out recovery at best.
I've written before that in my opinion it has been a failure. While some banks were saved, at least in the short term and the automakers and AIG got some relief, where is the overall stimulus to the economy. Infrastructure benefited, but while infrastructure is in much need of repair and updating, I doubt we'll see much job creation there. So you have banks, automakers, an insurance company and infrastructure, none of which have created jobs in any great degree. Without job creation and the resultant increased consumer spending, the stimulus package has to be considered a failure. Would we have lost more jobs and been worse off without it, maybe and maybe not.
I believe that the money would have been better spent by sending out rebates to taxpayers. If the money had been put in the hands of taxpayers, it majority would have been spent, boosting the economy by keeping the money in circulation. The banks did not keep the money in circulation, they hoarded the money, paid out bonuses and tightened consumer and business credit, worsening the economic situation. When consumers spend, retailers benefit, they keep their employees working. Manufacturers benefit by increased orders and they keep their employees working. Government benefits by increased revenue through payroll and sales taxes, so they keep their employees working. The restaurant and other hospitality industries benefit because more people are working and have more to spend on their services. When the money is given to a limited group, ie. banks, insurance, infrastructure and automakers, only the people in those industries benefit. When it is given to taxpayers who spread the money around, everyone benefits. If the government gets any of the taxpayers money back from TARP, I believe they should seriously consider sending it out in the form of tax rebates to taxpayers and maybe we'll actually see some improvement in the economy. If not, with the job market still hemorrhaging jobs and consumer spending down, I believe we're looking at a slow and drawn out recovery at best.
Saturday, June 6, 2009
Economic Recovery in Missouri
I recently read an article on cnbc about the different states and when they could expect to come out of the recession. Unfortunately, the state of Missouri is in the final 31 states, with recovery expected to begin in the second half of 2010. The central part of Missouri where I live, has been one of the hardest hit during the recession. Like a lot of Missourians, I am currently unemployed and am actively seeking employment. I haven't given up hope of finding a job, quite to the contrary. My place of employment went out of business on January 10th of this year and it was not until the past month that I got my first interview. However, I've had other interviews since and one coming up this week. Although I didn't get any of the jobs I've interviewed for, I was a top runner for the last job, so things are looking up.
With marginal improvements in the banking system and improvement in the stock market, I think it's quite possible that we might actually see recovery from the recession a bit earlier than predicted by cnbc's article. Central Missouri should be one of the first areas of the state to recover, since our local economy hosts a tremendous amount of state workers. While the state's government is suffering from the downturn, state employment has remained relatively stable, when compared to the rest of the job market. While I wouldn't look for too many raises for state employees anytime soon, at least they have jobs and benefits. A great deal of my job search efforts have been directed towards landing a job with one of the state agencies. Fortunately for me, I could take any state job offered, at any pay rate and do fine financially.
With marginal improvements in the banking system and improvement in the stock market, I think it's quite possible that we might actually see recovery from the recession a bit earlier than predicted by cnbc's article. Central Missouri should be one of the first areas of the state to recover, since our local economy hosts a tremendous amount of state workers. While the state's government is suffering from the downturn, state employment has remained relatively stable, when compared to the rest of the job market. While I wouldn't look for too many raises for state employees anytime soon, at least they have jobs and benefits. A great deal of my job search efforts have been directed towards landing a job with one of the state agencies. Fortunately for me, I could take any state job offered, at any pay rate and do fine financially.
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