October 21, 2004


Here is a thought to ponder. Monetary and Fiscal policy measures are the primary, if not only, means for the government and the Federal Reserve, to control or steer the economy. The primary way that it stimulates growth and consumption is by the fiscal policy of cutting taxes and by the Federal Reserve policy of lowering interest rates to encourage borrowing for investment and spending. This monetary and fiscal policy are the wheels that are turned in opposite directions, depending on whether the economy needs to be stimulated or cooled down to prevent high rates of inflation.

With that as prologe....look closely at our current state of fiscal and monetary policy. The huge tax cut that Bush has phased in, plus, record low prime interest rates means that the wheels are being turned to their limits in an attempt to stimulate the economy….but the economy is not responding in proportion with the efforts. That fact, in and of itself, should be a major cause for concern for everyone. Why, because if things start to get worse, our nation will have no leverage or play (through fiscal or monetary policy) to help pull the economy back up. We will be SOL.

Not only that, but with the crisis in social security, the rising budget deficit and plus the nations 20 year running trade deficit, cutting taxes in the future will further sabotage the standard of living or our children and their children, while giving us a brief relief from the inevitable. This nation is ridding on borrowed time folks. Our nation is akin to tires that have lost much of its tread and thus have not the ability to control its direction in our next recessionary rains. We will hydroplane out of control and likely crash.

The war on terrorism and In Iraq will by coincidence or conspiracy distract attention away from the structural economic calamity that is coming to this nation. WAKE UP PEOPLE…regardless of party affiliation.

see the coming train wreck caused by our poor conducters/leaders.


At 11:56 PM, Blogger animo said...

I stumbled upon your blog and was skimming and came upon a post regarding our country's current economic "adjustment". Except it was posted by Noah TA at 6:56 AM on Oct 21, 2004. Boom. Now I've just read your latest posting(s). Powerful stuff. I need a drink -- Glad I found your blog though.


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