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I was listening this morning to a story on NPR about rising unemployment when an interesting thought struck me. The story was talking about the negative feedback loop of rising unemployment leading to lower housing prices and more economic uncertainty. These factors then dampen consumer spending and keep unemployment high and even encourage more unemployment.
I know it’s a very perverse perspective, but my reaction to that news was that maybe there is an outside chance that our economy will actually undergo the correction that it obviously requires despite the best efforts of Bernanke and Geithner to prevent the necessary correction. If the economy continues to defy the stimulus efforts it may yet reach a solid foundation – but I won’t hold my breath on that.
2 replies on “Economic Recovery”
I am usually an optimist, even in the most difficult of times. But thanks to our governments reckless spending that has China and Russia calling for a new global currency I feel that we have huge inflation ahead combined with huge taxes. We keep hearing that the economy will rebound in the retail sector but as a small manufacturer who both wholesales and retails, I know that the credit freeze is alive and well on Main Street. Small businesses rely on credit to purchase inventory in advance of the season so for the first time in over half a century we are seeing some accounts request consignment. Also having the potentially devastating cap and trade looming is not helping the summer retail seasons. People know this would raise the prices of just about everything and health care would mean that the government would control 50% of the economy. So with all that looming, it is difficult for even a hopeless optimist to feel confidence.
I feel as though our government is waging a war on the private economy and the people haven’t woken to the reality yet that it is the private economy that has to revive the economy despite the obstacles that government is placing in its path.
Because I do not run a business (large or small) I don’t think I can speak as authoritatively as you on this subject but I believe that we agree that if there is a real recovery it will be despite the actions of our government and not because of those actions.