With unemployment at 10.8%, the country’s Gross Domestic Product down by 7.8% and mortgage rates above 15%, it was certainly time for the Federal Government to do some to spur the economy. What did the President and Congress do to get the economy moving again? The year was 1981 and President Ronald Reagan slashed tax rates to put more money in consumers’ pockets. Within two years, an economic expansion began that would last several decades.
The fact is that today’s economic challenge is not as bad as what the country faced more than twenty five years ago. Despite the fear mongering of President Obama, San Fran Nan Pelosi, Las Vegas’ own Senator Harry Reid, and the media, the sky is not falling. But that did not stop them from capitalizing on the current economic misfortunes to authorize the federal government to borrow nearly $ 800,000,000,000 to fund projects which even the Congressional Budget Office said would have little short term impact on our economy.
Thankfully virtually all of the Republicans in Congress voted against this wasteful bill. Of course my favorite Governor, our Republican Governor Charlie Crist, passionately spoke in favor of the bill while giving a nice hug to President Obama in Ft. Myers a few weeks ago which I found interesting because he snubbed President Bush several ago at one of his own political events. More on that when Crist runs for office again in 2010.
Of course, the Obama-Pelosi-Reid money train does include a reduction in payroll taxes of about $ 13 per week which is good for a couple of McDonald’s Happy Meals. But that reduction will only cause the related Social Security and Medicare tax receipts to fall which will further endanger the long-term stability of those government entitlements. Unfortunately, much of the $800,000,000,000 in government borrowings will go for “shovel ready” pork projects which will mainly put Obama’s labor union buddies back to work rebuilding schools, bridges, and questionable local government projects.
I am certainly aware of the current down cycle in the economy. The bust of the real estate market is evident where I live and elsewhere throughout the area. I witnessed an empty Dillards a few days before Christmas. I’ve noticed that Home Depot frequently now has more employees than customers. And my retirement and rainy day funds have been notably reduced as the stock and bond markets have adjusted to today’s economic news. But I do not believe the Obama-Pelosi-Reid porkulus plan will be the proper strategy to get the American economy moving again. We needed job creation credits for private industry and lower corporate tax rates to bring jobs back to America.
After 911, President Bush led an effort to ask Americans to keep the economy moving by convincing them to not let the fear of terrorism change their purchasing plans. Instead of scaring today’s consumers into sitting on their wallets, President Obama should be doing the same. Government spending will never energize our economy like you and me going out one extra night for dinner or entertainment, or starting that home improvement project, or buying a new car to take advantage of today’s great deals. And with loan interests rates at near historic lows – as compared to the 15% rates which President Reagan faced in the 1980’s, now is the time to borrow and invest in your business to ready it for the coming economic recovery. Forget Obama. Let’s do it ourselves.
