Today as I was traveling to my office I heard a stock market gruru stating that there has been 8 times since the 1930s that we have had a better than 50% growth in stocks since 1930. He went on to say the data was gathered by Bloomberg. In the year after the 50% growth in all but one time the stock market grew 8% more. The one time was when we had a double dip in recession in the 1980s. Do you remember what happened then? It is very much like we are today.
We have runaway spending at the federal level higher than any time in our history. This is not a Democrat or Republican issue it is an economic issue. We need to have jobs to continue to grow and to buy things. Pretty basic. We need small business and big business making profit or they cannot hire more employees and invest in good and services.
Government jobs do not count. Yes, when the employee spends it is like the private sector buy the money that pays for a government worker is from taxes or fees the government gets from us. The private sector gets its money by selling a good or a service. Again pretty basic.
Our unemployment and underemployment is getting larger. These poor folks who are out of work or are making less and can't afford to spend on anything but basics. If they can't pay there credit cards or the payments on there homes then the banks lose money. Thus the bail out from government (our money) raised through taxes. If they are out of work many of these people are receiving unemployment. Money from the government. Very basic. If we continue to lose jobs because fewer and fewer people have any money to spend. Then businesses go under and again few and fewer jobs. If we try to save the job situation by creating government jobs again it will be from taxes and fees. They must go up.
Now over lay on that situation a new cap and trade bill that everyone states is another tax on businesses especially on small business that creates somewhere between 65% - 90% of the jobs. If business has to spend money on the government while they are strapped for cash they must cut costs. One of the biggest costs to most businesses are employees. So, more job loss. Oh by the way cap and trade bill will also cost the consumer money in higher utility costs and each of the goods and services will have a higher cost due to the higher over head of every business.
Lets assume that the health care bill has at least some underestimate of cost to the businesses especially small business. Again they have to cut cost and that will translate to loss of jobs and even businesses closing. As the pool of people make money is reduced and fewer rich people are produced, Who will pay the tab. Government need more money to cover the new expensive plans. So we will all have to pay more taxes. Not a little more but an exceptional amount of money.
Now it is proven that as the tax rate goes up the government makes less money. I know that sounds rediculous but it has been shown to be true over and over again. So then what needs to be done?
We need more private sector jobs and we need State Governments and Federal Government to stop spending. At least stop adding to the negative spending. We are currently printing money at the federal level to help with the short fall. People do you understand that if we keep this up it will cost thousands of dollars to buy your groceries. Is anyone else concerned?
We definitely, from my perspective, are headed for a double dip recession or a depression.
Tim Lorenz
Instant MLS Listings & Free Market Analysis
"We have actually closed many short sales!"
949-282-2521
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