Another War; Another Recession. Whatdidyah Expect?

Last  spring I used my limited abilities in forecasting the economy and predicted a stock market crash. Now almost a quarter of my retirement account is in cash (I wish all of it was.). I felt stupid during the summer and the fall as the stock market climbed and climbed.

For the second time in my lifetime a stupid, foolish war built on lies not only wrecked havoc with another country but it is destroying the American economy.

It does not take a rocket scientist to get it right. The other shoe is going to drop, it always does. The only question was when.

Go on take 10% of your income and set it on fire, throw it down the toilet, or just rip it up. And just for good measure, borrow a lot of money and rip it up too.

It is so simple. You cannot destroy your resources and your assets. Imagine the homes and schools that might have been built. Billions of dollars - now that is stimulation for the economy.

Every bomb we dropped on Vietnam was another $5000 thrown away. Every time a bomber took off another 500 students could go to college - for four years.

The Johnson and the Nixon Administrations convinced the American people they could have guns and butter while the national debt grew. Then to compound the waste and the inflation, the oil embargo followed.

The ideologues said that Carter created the problem and that Reagan solved it. The problem was created by the waste of war and an inflationary rise on fuel prices. That sounds familiar. It simply took time to work itself out. Bonzo could have been president in 1982 and the economy would have recovered.

Now history repeats itself. Though this time we get the benefit of the war and the skyrocketing oil prices taking place simultaneously. So it only took only six years to ruin the economy instead of ten.

And the stimulus package is wothless. A $600 tax rebate in my hands is not going to fix the economy.  Take the money and invest it in needed public infrastructure that will stimulate private investment.

The puboic sector should spend it on projects that will stimulate signifcant private inestment. There I said it. The government should spend more money.

Update 1:45pm :  Jim Rowen notes the impact of a budget  on municipal budgets:  If Real Estate Values Fall Across the Board.....

Then there is the impact on the State budget.  As one of our commentors says, that may be even more significant. The decline in income tax collections and sales tax collections will be devestating.

Comments

[snowbeltliberal]

While growing up during the 60s and 70s my mother, who grew up and came of age during the depression and WWII, always warned us, whenever she thought that we were taking our blessings for granted, that "You should have to live through a depression and a great war."

Well now, thanks to Dubya, I'm getting the chance!

[Michael J. Cheaney]

All that along with a shortfall in state tax revenue, Means our taxes will be going up yet again!!! (Because remember, State government is already operating bare bones. pfft)

YEA!!

[Jack Lohman]

I don't know, Guys, but some day someone has to put a stop to our moneyed political system. Virtually all of today's problems has its roots in campaign cash. See http://tinyurl.com/2eerzo

Jack Lohman

[Bob Keith]

Whaa? The Play House is listing? Johnson/Nixon; Ford/Carter; Bush/Clinton/Bush/maybe-Clinton-agian. What's the matter here? Two-party paradigm got us all down? Veit Nam / Recession / Iraq / Recession. Ya'll should try to work blue-collar for the 40 years in question here. Give it a try when you have some free time.

Keep voting in the millionaire, two-party, du-opoly. I so look forward with bated breath to their next war and much anticipated recession.

We are after all, their obedient suckerssssss!

Bob Keith
cooldadiomedia.com

[kr]

Well Michael do you get it? Whatever does happen with state government is because the crap created by the wasteful spending in Iraq is now flowing downhill.

Better get used to Democratic party rule. Thanks to the economy the Democrats will be in charge for the next generation.