Yes, two years ago we were in free fall (to Kevin). Today, we are days aways from probably having our nation’s credit rating down-graded. The reports I’ve heard lately say that if that happens, it will almost certainly lead to more inflation. We already are experiencing inflation in cost of goods. I’m paying more for groceries today than I did two years ago. We are still enjoying low interest rates from lenders and that would be outstanding to take advantage of, if only I could find someone to lend. The lenders are being stingy, even when you have outstanding credit, which somehow I still do – thank God. So I submit to you that we are again on the verge of free-fall, albeit of a different nature. What may happen to our economy in the coming weeks if current predictions come to pass, is not something that I would define as stable.
ARRA may have saved a few jobs and even created a few, but my understanding is that it was not nearly as effective as even President Obama had hoped and presumed it would have been. I recall him saying not too long ago that those “shovel ready jobs” weren’t as shovel ready as he thought. I’ll give him credit for at least admitting it.
In the kind of severe recession we faced, lay-offs were happening on a massive scale but two years after ARRA, I’m still hearing crazy numbers like 300,000 new unemployment/jobless claims per week.
What about all of the $$ spent on extending unemployment benefits? Isn’t it possible that more people could have been helped and for a longer period of time if the government set up an unemployment program where recipients were required to earn something, even if they could only find work per diem for one day a week and then received benefits to make up the difference? What about a program like Clinton’s Americorp where people volunteer “X” amount of hours serving on their community projects and receive some sort of pro-rated compensation or so many dollars worth of credit toward higher education? Programs like these would have kept people involved, networking in some capacity, and productive and it would have stretched the government’s dollars further and longer. Maybe by that time, a few more projects would have been shovel-ready. At the very least, the way the funds were distributed and used should have been thought out and mandated more efficiently. But government is not known for being an efficient job creator and in this case, it shows.
If cuts are made with care and proper planning, they shouldn’t be damaging. Plus, neither the House nor the Senate is talking about overhauling and simplifying the tax code as part of these debt ceiling talks. They can’t do that because each party is beholden to their own special interests, be they big multi-national corporations, or the unions. No one wants to take on their “friends”. Big companies and small businesses aren’t hiring because they don’t trust this economy, nor this Congress, nor this President. And a complicated tax code doesn’t help. All of these things can be remedied, even if only temporarily, but it’s never going to happen. Read the rest of this entry »