Describe Your Own Economic Recovery

"If the proposed tax hikes go through and the current restrictive practices... "

--- "Figures lie and liars figure." Mark Twain

And you point is exactly what?

For starters, there are no tax hikes being proposed.

Not quite true. The tax cuts enacted by President Bush are set to expire. The net effect is less money in the private sector and more money in the government coffers once they sunset.

The other thing that signals tax increases is the ballooning deficit. It was horrible when Obama took office and much worse now. The interest alone is crushing.

Also, have a look at the sudden growth of the Federal government. Again, the cost of this is paid by the working public.

No matter how you peel it, Obama is looking for ways to extract more money out of the public sector and funnel it into the federal government. As that happens you will see an increased burden on the economy, which is not situated economically well right now.

The rhetoric is that tax increases will be shouldered by those making $250,000 and more. Unfortunately, many small businesses will get the brunt of that because they file taxes as an LLC on the owners personal income taxes. The net profit of most of those businesses will push them into a higher tax bracket, even if the owner takes only a modest salary for him/herself.

Those that do earn over $250,000 will have less money to spend or more importantly, invest into the private sector. This will retard hiring and business growth as revenues dry up.

Lastly, no taxes being proposed is untrue because Congress is already looking at other streams of revenue such as a national tax on Internet purchases and a VAT (value added tax), which taxes goods and services from concept through finished product. Yet another ball and chain on the economic sector.

However, I am optimistic that we are unlikely to see anything truly draconian and a national sales tax or VAT will likely be voted down, but I feel sure that there will likely be higher taxes in one form or another.

Okay, what else?

Maybe 10 percent of what you respond with is true. Mostly speculation and the usual fear mongering. Our economic problems right now are that people are not spending. It is difficult to sell your product because of it. It is a Catch 22. When money flows it flows everywhere regardless of taxes. Even the "rich" recognize this and most are not opposed to being taxed more because they fully understand the end game.

Where do you get that 10% figure? Show me the data?

Where is the poll or data that shows most[/i] of the rich are not opposed to higher taxes?

For that matter, who among us, rich and poor, wants to pay higher taxes?

The government has had a long historical record of spending money very inefficiently. There have been a few exceptions, but there is a far, far greater number of examples where government spending is much more inefficient than the way the private sector spends money.

I've explained why businesses (and individuals) are sitting on their cash. Quite plainly it is because of the great deal of economic uncertainty that lies ahead. There is good reason for this because it was government social engineering programs (specifically, the CRA initiated in the 1970s) that were the root cause of the financial meltdown.

Our economic problems right now are because WE spent too much, both publicly and privately. Evidence of that is easy to see when you look at the public and private debt.

Government could seize 100% of every person's salary for the whole year and we still would not be able to pay off the public debt.

Again, total nonsense.

Good counter argument.

The work force is not quite back to the numbers it was. Orders and production have slowly increase. Production is now working mandatory 10 hrs OT. Like A.H. says its come up on the end of the year. Customers are in a spend it or lose it attitude.

What recovery? It does not look like things will be any better any time soon for our office.

Really?

From my point of view the world economy outside the US is recovering fine, but the US is sucking a mud through a garden hose. This is because of our own economic and political policies, we just like the pain.

Funny, in 06-07 some people were screaming recession, when there was none until 09 and the attitude helped trigger it. Now the experts say it ended in spring of 09, but it still feels like recession and unfortunatly it will continue to feel this way for a decade of more, same situation as Japans "Lost Decade".

Bail-outs and govt interferance with business prolongs pain, the world would not have come to end if we let the economy colapse in 08, its like a bankruptcy, someone comes along and buys up the remains and business starts over. Here is an example from the medical industry, a doctor will take a diabetic person with bad circulation in the feet and an infected toe, they will cut one toe off at a time and then cut the foot off an inch at a time trying to preserve the foot for the person as long as possible. The cutting will continue over the period of years until about the mid calf, most end up as below knee amputees. In the mean time the person spends the last 6 years in and out of the hospital, infection, cut, recovery, infection, cut, recovery. Quality of life sucks and the longer a person spends recovering the harder it is to ever dig out of the hole of loss of functional fittness, from vast personal experience these people should bite the bullet and just do the mid calf amputation and in 6 months your up walking on a prosthesis. sounds harsh but its the better road to take, cause the people that spend 6 years getting their foot cut off an inch at a time usually never fully recover and die with in 2 years. They spend too much time being sick and recovering.

Our economy is the same way, Tarp and bail outs put money in the pockets of the people that needed to fail, bankruptcy is how we fix it in the US its in our constitution, its a quick amputation, painful yes, but it allows for recovery. This slow painful inch at a time method is dangerous, cause sometimes the doctors dont cut fast enough and the patient dies.

I am from India one of the BRIC country, we are growing very fast may be two digit growth. I think your country needs good and bold economist to drive your country from past mess. Next time you should elect great economist as your President instead of a Lawyer from Chicago or Great Man from Texas. You have many good economist at Harvard and other universities like we have Prime Minster Mr.Manmohan Singh who was Prof. of Economics at JNU university in Delhi.

Our President is NOT a lawyer. He surrendered his law license in 2008, before being dis-barred by the IL bar association, due to lying on his application.

http://www.truthorfiction.com/rumors/o/Obama-Law-License.htm

Thanks for updating my knowledge.

Wrong. Read your link carefully, according to the link, that was the rumour and was shown to be untrue, or at least not proven. You are right though, that he is no longer a lawyer.

I'm certainly not in love with this administration. I've been looking at this blog and can't figure out how to respond without it turning into an ugly rant, so I guess I'll just read everyone else's posts.

Let me know if I'm reading your link wrong. From what I saw, the shaded area is the rumour.

Some people just cannot accept that a highly intelligent black man is president.

Its not that he's an intelligent black man, its because he's a progressive socialist with no experience outside of academia or politics, he's never ran a business, and has no leadership experience and this was all know before the election. What American and the economy can not accept is liberal socialism, it doesn't work economically, has been prooven to not work many times and is a destroyer of free enterprise. Unfortuatly we are in a slow downward spiral economically, we have been able to slow it down but in the last 50 years we have never been able to reverse it. It is not cause he's half black, half white. let me quote an old saying from the 80's,

"IT'S THE ECONOMY STUPID"

Socialism? Total BS. You don't even know what that is. How about explaining why is it ok that deregulation and "free markets" almost destroyed the entire economy in one swoop. Be careful what you wish for.

Fortunatly I do know about socialism grasshopper, your mistake in thinking deregulation and free markets is what caused this shows your lack of education.

You asked for an explaination,

progressivism started back in the first part of the last century but the recent economic downturn started with an Act passed by congress in the 80's to make loans to sub-prime lenders but it had no teath in it until additional acts passed by congress in the 90's, this allowed Acorn and other organizations to sue banks into making the loans. See the following.

Best Answer - Chosen by Asker

"Sub-prime loans were created because Congress wanted more Americans to become homeowners. To do this they forced the large lenders to relax lending standards and create lending programs so that more people could qualify for mortgages. When the borrowers couldn't pay the mortgage, the foreclosure numbers started to rise. Then Congress said, "you nasty greedy lenders, you took advantage of these people". Congress created the sub-prime housing bubble, and when it burst, we all felt the shock wave."

The second factor that caused this recession was congress in the mid 90's repealing the "Glass-Steagle Act" An Act which our wise forefathers established in the 30's so another depression wouldn't take place. By repealing this act it allowed investment banks to do the risky bundling of mortgages, Duh, bad idea.

There are other factors but what you really need is an unbiased, nonliberal education in economics.

Note: the economy will not get better unless we fix the root of the problem and stop, using band-aid solutions, bailouts, and blaming the rich.

GA guest. Not to worry though, the President just signed a bill into law yesterday, making it easier for small business to borrow money, that'll fix everything.........I wonder how much pork is in there?

I think every member of congress should be required to take business and economics courses, even if it's at night, online courses. It's ridiculous to put people in charge of a countries financial future, that have never been in business, have never run anything and are clueless when it comes to anything regarding sound economic policy.

Many of them see the tax money coming in as a bottomless well of money to finance social projects that offer no return on the investment, but votes in future elections.

I'm glad to see people that have run large companies stepping up to the political plate, hopefully they can win and inject some common sense into the system.

PS. I just remembered, like you said, the last time the Gov't forced lenders to relax lending standards, it lead to the housing bubble and mortgage crisis. Gee, that worked so well, let's try it again in the small business sector......Duh!

This whole notion of not allowing individuals or businesses to fail is ludicrous exercise in futility!

This is one of the bigger reasons we had the meltdown. It was called the Community Reinvestment Act or CRA and goes back to its passage in 1977.

While the intent was to increase the number of homeowners, it created an imbalance of risk for the loan holders that eventually spiraled out of control.

While deregulation may have some part in the mess, the CRA was the root cause.

Thx hero, I couldn't remember the name of the act. GA

No. It was Lehman Bros. with their finger in that pie. Your would probably also argue that it was environmentalists who cause the Gulf oil spill. Get real.

Your "history" lesson is only a fantasy for you. You must have gone to Gleen Beck university.

GA Hero.

I wouldn't want to interupt your long winded political hackery. By the way -- The small business bill that the President signed earlier this week would help far more small businesses than extending the Bush tax cuts for those above $250,000. All but two repubs voted no. Not to mention that Obama lowered your taxes last year. How dare that commie socialist do such a thing. (I am sure you have some spin for this.)

A stable economy is about pragmatism - not idealogic extremes or mischaracterization. Both extremes of liberal or conservate are wrong, but they are more than just wrong. If given their full head, either will destroy this nation.

This is true and well said. Our founding fathers used symbolism to illustrate that very fact. The symbol of the American eagle depicts the two wings (left and right) required to fly between tyranny and anarchy. Both wings are required to fly straight and level.

That is a bit of a simplification of the symbol, which also had three heads (executive, administrative, and judicial).

What I see from thousand miles away that he is good orator, may be intelligent also but where are the results?.I do not judge people by colour of their skin but by their performance.

Engineers are generally intelligent also, but I wouldn't put any of them in charge of a bank, or my investment portfolio.

What is recovery?

Back to the "far too high" standard of living? xx?xx???xxx? To recover, IMO, this standard has to be compared with the rest of the world. And that is very difficult, because values differ still too much.

I guess the next step is to brainwash a little deeper and then blame all on China. Some mistakes in life are painful at discovery, but even more painful to correct.

The US has grown steady but has forgotten to calculate, and the PR of the bubble society has been so powerful that even the old world believed in the rackets of hedge funds and "contracts" money and paid dearly.

Stabilization takes its toll now. At the end the US is still young. Younger than the Bolshoy Theater.

It is easier to grow fast from nothing than from a higher platform. In the past, these situations fueled wars, civil and/or uncivil.

We need a renaissance, without too much of a death. But the bill will be paid as usual... by...

CEO's Less Willing to Hire

This echos what I was stating earlier. Not a good sign.

"Just 31 percent of the 125 CEOs surveyed told the Roundtable they expected to add jobs in the United States over the next six months, down from 39 percent who expected to do so in June. Twenty-three percent expected to cut jobs, up from the 17 percent who reported that in June.

"Sixty-six percent said they expect increases in revenue over the next six months, down from 79 percent in June."

To me that article seems good and bad. The bad, being that they don't plan on doing any hiring, which won't help the economy in the short term.

The good, being that these companies are able to eek out profits, despite the fact that they've got fewer workers and are hobbled by taxes and regulations here in the US. That, I think, is overall good news. This is exactly the approach that US firms are going to have to adopt if they have a prayer of competing in the global marketplace. Once they have established themselves as global players, I would hope that expansion and hiring would follow..............

Or, I'm being overly optimistic I still believe that if the Gov't gets out of the way, the US, (private sector), still has the ability to make things smarter, faster and better than most others.

Read it this way; look at the sharp drop in confidence since June. If it were a few percentage points you would dismiss it as either noise or a slight downward trend at best.

However, the negative double digit percentage of change swings are very disturbing to me. In particular is the increase in the potential of additional RIFs going from 17% to 23%, which is a 33% jump in just a few months.

Essentially, since June significantly more CEOs see even rougher seas ahead in the next 6 months than they are currently sailing through now. This is clearly trending the wrong way.

I agree. I also think a recovery will come at some point.

But......, it's not going to be the type of recovery that most people think. Not a return to the, "good ole days", where the American middle class live in $400,000 houses and drive Escalades to the kids soccer practice. I think those days are history, or soon to be.

I think people will get back to work in time, but, they will be driving older cars, living in smaller houses and working for less money.

When I was a kid, 1960's-70's, owning a house put you in the middle class, (any house), the term Mcmansion didn't exist. My Dad would buy a modest new car about every 5 years, and my Mom would get his old one to drag us kids around in. Going out to dinner happened about once a month, and that was McDonald's, unless it was someone's birthday. I considered us, not rich, but fairly well off.

Anyway, I'm kind of seeing all of this as much as a long overdue correction, as anything else. We have collectively been living in a, "Lifestyles of the Rich and Famous", bubble, that's been building for at least two decades. Well, that's over. Time to face reality and move on. Businesses and individuals seem to be getting it. Only the Gov't is still steeped in denial.

1st, we need to bring manufacturing back to USA. Without a good manufacturing base you will never have jobs and growth in this country. We all can't work at hospitals or burger joints. But more important then that is we need to get back to civility in our conversations with and and about politics. We also need to mandate that our politician's do the same. I have not seen one political add this season that says anything about anything but negative comments directed at the other party. I think anyone who is doing this and is in or holds a office should be fired. Just like you or I would be in your jobs. We do not need this in our lives.

My 2 cents

You wrote, "I have not seen one political add this season that says anything about anything but negative comments directed at the other party."

You must be new to politics. Political ads have been doing that since the dawn of time.

Rule number 1, don't say anything that commits you to anything. So what is left to talk about?

Fixit,

The only way to bring back Manufacturing to the US is to lower our wages to be competive with China, the unions wont let that happen, and no one wants to work for $5.00/day. The other way to do it is to put up trade barriers, so that foriegn goods would be as competitive as one we make, this wont work either cause we spent the last 50 years making trade more open (in order to prevent wars, that was the thinking).

The only way I can think of to bring manufacturing back is to wait for the natural cycle of collapse and then rebuild. Problem is the colapse of the USA is going to be an long slow downward spiral 30-50 years, (unless it gets sped up). The reason it will be such a slow downward spiral is the lack of gumption to do the hard things required to fix it and the conservatives wont let the left destroy it quickly.

Actually, it has more to do with China (and a few others) manipulating its own currency and not allowing it to free-float with the rest of the world.

It's getting to a point where it is getting serious. Last time this happened it triggered a war. You may have heard of it... It was called World War II.