Getting the unemployment rate down from where it hovers at the official 10% rate, to 5% and lower, is not going to be easy. Not as easy as the wan gestures we are getting from the Obama administration.
As a starter, the unemployment rate is actually over 17% when you consider the truly unemployed. Not only those who still haven’t given up seeking a worthwhile job or are on unemployment income while it lasts. The truth is, the official unemployment rate is skewed.
The basic needs that are not forthcoming are the jobs. To get that going, the economy must improve. That means psychology must get rosier. More money has to get into households. That’s not improving by a long shot.
Some improvement in household net worth occurred when the stock market recovered. But that was primarily from the Dollar Carry Trade. That is: The ability for major investor players to borrow at low interest and invest in higher-paying assets, which helped raise the value of the stock market. It boosted public psychology as well.
That sort of household wealth and outlook isn’t enough. You simply have to get more funds into the hands of the consumer.
What will do that? Lower income taxes, fast. And productive private industry jobs, fast.
To produce jobs you must get small business starts going by cutting their taxes. And you have to cut government debt. Servicing that debt makes it impossible to keep taxes low or to make a dent in their reduction.
It’s really simple. The White House says it is doing it. But saving 1% as it actually proposes in a multi-trillion dollar deficit budget is impossible.
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