America's fiscal challenge has become increasingly daunting and we run the risk of plummeting back into recession.
Often times the second dip is worse felt than the first.
Through too much political posturing and too little actual problem solving, we are facilitating the resurgence of the great recession.
The United States fiscal policy has been described as "gas now, brake later," without clearly establishing how and when to brake.
All told, the current stimulus initiatives have added $1 trillion to the national debt.
The problem is not only the amount per se, but that the stimulus packages have done virtually nothing to stimulate growth in any sector.
In fact, one might venture to say that our stimulus bills exemplify the dangerous absence of any strategy that would deflect a downward spiral.
Along our current path we run the risk of a recessionary resurgence, but we still have a tiny window of opportunity through which we can reverse our fortunes.
The balance of the entire $1 trillion in stimulus monies has been earmarked, but not a single penny has served to reverse the economic slide facing the US and the world.
What is congress's answer, "spend now, let someone else deal with it later.
" Even without a clear action plan in place to address our hyper-indebtedness, legislation is being considered for an additional $134 billion in stimulus monies, of which, $79 billion qualifies as more band-aids to include extended unemployment and health subsidies.
An additional $26 billion has been earmarked as "emergency aid" for government employees who now face layoffs while the rest of the funds are distributed to various "other" constituencies that will not contribute a dollar to battling our economic crisis.
In real money terms, our mismanagement of funds over the past 2 years has cost us not only the one trillion dollars in spent money, but billions of dollars in unearned revenues.
Had the stimulus monies been distributed more correctly to support the free market instead of frivolously and ineffectively expanding the public sector we could have been well clear of this recession by 2011.
Despite being on the verge of a double-dip recession and enduring a colossal misappropriation of tax dollars, America may still yet have a chance to level her wings.
On our current course by 2015 America will suffer a structural deficit of more than 6% of GDP.
This is expected to be higher than the entire Euro-zone in the same time frame.
So where does recovery begin? For starters, government borrowing for public services needs to be subordinated to private sector economic revival initiatives.
Additionally, governments have pushed to depreciate their currencies in order to boost export with other countries.
While this addresses one segment of the problem, it further harms another.
What is overlooked with the depreciation strategy is that foreign holders of local currency will suffer massive losses further crippling a nation's ability to stabilize its economy.
Depreciation is not an effective strategy to solve the root of the problem.
Funds must be redirected from massive public projects to smaller private ones with large probabilities of success.
Relief shouldn't just come in the form of tax cuts.
While certainly they help, they don't do anything to get struggling entrepreneurs cash ready to move forward building their business.
They simply delay a collapse.
Allocating "emergency aid" for innovative private sector projects will produce far more advances in our economic recovery than any other stimulus plan.
Further, we have to let market prices adjust to realistic levels.
Many of our financiers are living in a world of over-valuation utopia.
This is very harmful to a fragile economy's recovery.
According to one source our S&P Composite price/earnings ratio is still trading at 20 times earnings.
The only other time we've experienced a spike this erratic was right before the market collapsed in the late 1920's and early 1930's.
We can get prices back to normal faster by not giving away stimulus money that does not get a return.
If our governments act on these strategies the consumers will come and the recession will be left behind for good.
Our window to adjust our out of control spin is fast closing.
If not probably managed through, I fear we will succumb unwillingly to a second dip in this crisis.
Often times the second dip is worse felt than the first.
Through too much political posturing and too little actual problem solving, we are facilitating the resurgence of the great recession.
The United States fiscal policy has been described as "gas now, brake later," without clearly establishing how and when to brake.
All told, the current stimulus initiatives have added $1 trillion to the national debt.
The problem is not only the amount per se, but that the stimulus packages have done virtually nothing to stimulate growth in any sector.
In fact, one might venture to say that our stimulus bills exemplify the dangerous absence of any strategy that would deflect a downward spiral.
Along our current path we run the risk of a recessionary resurgence, but we still have a tiny window of opportunity through which we can reverse our fortunes.
The balance of the entire $1 trillion in stimulus monies has been earmarked, but not a single penny has served to reverse the economic slide facing the US and the world.
What is congress's answer, "spend now, let someone else deal with it later.
" Even without a clear action plan in place to address our hyper-indebtedness, legislation is being considered for an additional $134 billion in stimulus monies, of which, $79 billion qualifies as more band-aids to include extended unemployment and health subsidies.
An additional $26 billion has been earmarked as "emergency aid" for government employees who now face layoffs while the rest of the funds are distributed to various "other" constituencies that will not contribute a dollar to battling our economic crisis.
In real money terms, our mismanagement of funds over the past 2 years has cost us not only the one trillion dollars in spent money, but billions of dollars in unearned revenues.
Had the stimulus monies been distributed more correctly to support the free market instead of frivolously and ineffectively expanding the public sector we could have been well clear of this recession by 2011.
Despite being on the verge of a double-dip recession and enduring a colossal misappropriation of tax dollars, America may still yet have a chance to level her wings.
On our current course by 2015 America will suffer a structural deficit of more than 6% of GDP.
This is expected to be higher than the entire Euro-zone in the same time frame.
So where does recovery begin? For starters, government borrowing for public services needs to be subordinated to private sector economic revival initiatives.
Additionally, governments have pushed to depreciate their currencies in order to boost export with other countries.
While this addresses one segment of the problem, it further harms another.
What is overlooked with the depreciation strategy is that foreign holders of local currency will suffer massive losses further crippling a nation's ability to stabilize its economy.
Depreciation is not an effective strategy to solve the root of the problem.
Funds must be redirected from massive public projects to smaller private ones with large probabilities of success.
Relief shouldn't just come in the form of tax cuts.
While certainly they help, they don't do anything to get struggling entrepreneurs cash ready to move forward building their business.
They simply delay a collapse.
Allocating "emergency aid" for innovative private sector projects will produce far more advances in our economic recovery than any other stimulus plan.
Further, we have to let market prices adjust to realistic levels.
Many of our financiers are living in a world of over-valuation utopia.
This is very harmful to a fragile economy's recovery.
According to one source our S&P Composite price/earnings ratio is still trading at 20 times earnings.
The only other time we've experienced a spike this erratic was right before the market collapsed in the late 1920's and early 1930's.
We can get prices back to normal faster by not giving away stimulus money that does not get a return.
If our governments act on these strategies the consumers will come and the recession will be left behind for good.
Our window to adjust our out of control spin is fast closing.
If not probably managed through, I fear we will succumb unwillingly to a second dip in this crisis.
Source...