Flopper
Diamond Member
I think there is something you are missing. Government is only one of many factors that influences business. Fiscal policies such as government spending and tax rates and Monetary policy such as fed interest rates and money supply are only tools used by the government to nudge the economy in one direction or the other.Failing to cut taxes will increase business' unwillingness to expand. Government will never generate sufficient revenues to cover their deficit because every extra dime gets pledged out in new programs. Reagan was right that the only way to cut government was to starve it of funds. I agree the fed gov will not cut taxes. And I hope you agree that this will keep this recession prolonged for the rest of Obama's one term.
The major factors that push our economy into recession are excesses in business, consumers spending, and government. Regardless of government intervention, the economy will not recovery until those excesses are sufficiently corrected.
Excesses in business always occurs with economy expansion. We introduce product lines that are marginally profitable, we hire too many people, and get complacent. When a downturns occurs, we cut the fat and improve our efficiency. This is what has been going on since the recession started. By historic standards, business is lean and mean.
Consumer excesses have been on a pretty steady rise for 20 years. Consumer debt has risen steady out stripping income. Millions of homes were bought by those who could not afford them. Consumer savings fell year after year wiping out any financial cushion. The correction in these excesses are still going on and probably will for several years.
Finally government policies are also responsible for the downturn. Government policies have encouraged excessive home buying and loose credit. They have started to change with the financial reform law, however their is still more that needs correcting.
Government can nudge the economy along, but it will recovery at it's own pace. Politicians must always claim they have the answer but they don't.