Monday, November 23, 2009

Better Than Expected Economic Growth in 2010?

My Fellow Americans,

Here they go again. Everybody jump for joy! The Recession is OVER!!!

This is what was declared just last month according to leading economists and the National Association for Business Economics (NABE).

In an article on Fox Business, NABE President and chief economist at Point Loma Nazarene University Lynn Reaser says this: “While the recovery has been jobless so far, that should soon change. Within the next few months, companies should be adding instead of cutting jobs.”

When...or maybe the real question should be...HOW are companies going to add jobs? Will it be when Obama/Pelosi-Care is enacted? How about cap-and-tax? Will that help "stimulate" the economy?

What these "economists" don't tell you is that companies NEED to cut costs. They have no choice right now. And cutting costs involves dumping jobs. That's just the way it is. It's one of the only ways they can keep their heads above water. We all understand this.

In uncertain times like these, companies don't add jobs. They use temporary workers or outside contractors. This keeps salary and benefit expenses low.

Small businesses, the backbone of the American workforce, are in a holding pattern. They are worried not only about Obamacare and cap-and-tax, but also card check.

My favorite part of this article with regard to the panel's "insights" was this: "...the unemployment rate would be 10% for three quarters beginning in the fourth quarter this year and dwindle down to 9.6% by the end of 2010. In its forecast a month ago the NABE panel said the unemployment rate would come down slightly faster, dropping to 9.5% by the end of next year."

Folks, the unemployment rate is really near 17% when you take into account people who have stopped looking for work or settled for part-time employment. On what basis can these fools at the NABE really project, with any confidence, a decrease in overall unemployment?

On top of that, say unemployment does decrease to 9.5%, so what? Is that really an indicator of the end of the recession?

When will people realize that we are being lied to?

And finally, they touch on the housing market. They say it will "gather momentum." Now first off, I think if first-time homebuyers and real estate investors are smart (and they can get a loan) they would buy now. Prices are lower and homes are more affordable.

And don't be misled to thinking this is about the tax credits (although that is what got many people in the door). Many economists believe the tax credits will only "reinflate the bubble." It really is just bad policy.

But, I digress. I want to know what YOU think. I have already said too much.


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