Posted on 09/06/2009 8:47:03 AM PDT by Dysart
Unlike President Barack Obama, I believe we are in for a long recession. I base this on three criteria.
--Unemployment. It is rising fast, in both Britain and the U.S.
--The public deficit. It is rising at a terrifying rate in both countries. The White House calculates that the deficit over the next ten years will be $9 trillion, which is $2 trillion more than estimated in February. The comparable figures in Britain are also bad, with deficits this year and next at more than £175 billion,...
--Neighborhood shops. In my little network of streets in London, 28 shops have shut during the last two months; Another factor making me pessimistic is that I have no confidence that the American or British governments will do the right thing--or refrain from doing the wrong thing--to end the recession. Never in modern history have the two great English-speaking nations been led by such appalling governments. It's hard to decide which is the worse. As Dr. Samuel Johnson put it when Maurice Morgann asked him who was the better poet, Samuel Derrick or Christopher Smart: "Sir, there is no settling the point of precedency between a louse and a flea."
I have no sovereign remedy, other than for these governments to cease expanding their public sectors and to reduce costs by cutting public-sector jobs by 10% or by decreeing an equivalent cut in pay and pensions. But I know that under no circumstances will President Obama or Prime Minister Gordon Brown take either step.
I do, however, have one piece of advice for this recession time that can, with profit, be adopted by all: Take up walking. And by walking I mean exactly that: walking at a normal, natural pace--say, at about 3mph--not jogging, which is hard on the body and soulless.
(Excerpt) Read more at forbes.com ...
It’s already been a very long recession.
Yep, I’m sure happy that the Democrats passed Porkulus to fight the recession. It’s all about a three letter word according to Joe Biden “J-O-B-S”.
Can’t believe the Democrat spin on Porkulus. They now say that things would have been even worse without it. And they inherited a bad situation, yadda, yadda, yadda.
Now I'm just a silly engineer, but if the deficit is going to be $9 Trillion, the origional GUESS was $7 Trillion with an error of $2 Trillion. This is an error of over 28.5%, after a period of 6 months. I have no confidence that the new number is anywhere close to correct.
So, when the White House revises numbers on a 10 year forecast after 6 months; due to an error of 28.5% - I think it's safe to say that they have no idea what they are talking about. What will the error be in 6 more months, 2 years, 5 years or a decade out. Accuracy of this magnitude, left unquestioned, is what got Social Security, Medicare and almost every program managed by the gov't to go bankrupt. If I had errors anywhere near this magnitude in my work, I would be fired.
The two choices left to both governments are to ruin their respective currencies through hyperinflation, before “debt and promise” default is forced on them; or to have “debt and promise” default first, and save their currencies.
They are both weasel governments, so they will try to fudge their way through and cause hyperinflation. However, if it happened to Britain and the continent first, it would be better, because if the US saw what was happening it might *not* do the same. And from that position could help Britain and the continent.
But I’m not betting on it. These are people who are so timid and naive that basic pattern recognition is lost to them. They will stick with moribund Keynesian economics until they are thrown out of the lifeboat by those who are more pragmatic.
What it means once more sensible heads prevail is that the age of easy credit at all levels is over. Both governments will be forced into surplus budgets only because they have no choice. Largesse will be over, including Social Security and government medicine. And in the US, Defense will have to be cut by at least 50%, which means most overseas deployments will end, with just a few critical ones remaining.
It is likely that this will be forced, in the US, by the individual States, as the federal government is incapable of controlling itself in any way.
You may well be right about states taking the reins but hope remains for big changes in congress critter makeup in 2010— not just D—>R but in the prospect of true fiscally responsible and economically literate Conservatives gaining power and influence. Otherwise, you’re right, it will have to be led by key states... I can see no other path.
Couldn't agree more....
In 1965 Medicare was "estimated" by Congress to cost $6 billion in 1990. The actual cost was something north of $113 billion. Must have been a rounding error, huh?
Perhaps a nice, brisk walk past an Obamaville will allow you to see the results of this administration’s failed economic policies ...
I don't need to take a walk to see the results of Obamalamadingdong's economic policies. They're plain as day for all to see. However, if one should get the urge and decide to take a walk in Obamaville I would suggest that it indeed be a brisk walk, lest ye might get thumped upside the head....Chicago style.....come to think of it, that's what's happening to all of us, isn't it?
I was gone to MN for three weeks (kayaking/camping) and on my drive home, there were seven small shops closed with “for sale” signs in front of their shops for the 15 or so miles from the State line to my house. I later learned that the banks have been calling in their loans on businesses. My auto repair shop also closed because the bank called in its loan. I’m upset because I’d finally located a repair shop I could trust.
He's just trying to make America look a little more like his native Kenya.
Small business owners will have to learn to finance their businesses without bank loans— which means being resourceful, creative, savvy, and willing to grow incrementally. Attending to industry-specific strategies that maximize cash flow, above all else, is paramount. It’s a brave new world in sm bus operational mgt! I’ve never in over 17 yrs taken out a bank/sm bus loan and I certainly never will.
I’ve never in over 17 yrs taken out a bank/sm bus loan and I certainly never will.
That certainly sounds like a prudent strategy. I would be interested how you invested in large capital. In some businesses one just cannot compete without it. I suppose venture capital would be an option. I suspect another option is to be very selective in business selection - choosing businesses that that don't require it. Sounds much easier said than done. I am employed in a very capital intensive occupation for a large corporation and our lab has been repeatedly downsized because of cost pressures. I've been considering what I might do next after the inevitable occurs and am quite wary of capital-intensive endeavors...
I rolled (modest) capital from another business for startup, and started very small and scaled slowly. Vendor financing was/is crucial my industry, along with a good trade buying group. These concerns have specialized knowledge of my industry and I further found that I could leverage their industry expertise as well as their capital. But, again, an ongoing focus and nurturing of positive cash flow cannot ever be minimized or you will end up chasing your tail in the end. LOL. This is one principle you can actually take from a business theory environment into the marketplace. In fact, you must.
Thanks for the helpful insight.
The Democrats may have inherited a bad situation. But by all analyses, they are making an already bad situation much, much worse, by trying to “fix” things, when EVERYBODY would be much better served by the “fixers” just getting the hell out of the way.
Given, that George W. Bush should have stood back and let the supposed “collapse” just happen last September, and we would not be in any worse shape than we are right now. That being said, Bush, Bernanke and Company went right ahead and dood it anyhow.
Realizing, there is a war going on, and a vast economic contraction simultaneously, contradictory events that seem to be closing in with remarkable suddenness. Prediction: the now failing nascent obama regime will call for a bug-out in both Iraq and Afghanistan soon, probably before Christmas, making our involvement there for naught, humbled like the Soviets were in early 1989. We got problems here at home.
Only this time, the dam shall have burst, and there is no controlling the catastrophe before it has run its course. Oh, there will be stopgap attempts, but they will prove only to be expensive experiments in futility, altering neither the direction nor the sheer preponderance of the problems.
And it must be said once again - if you can’t stand the heat, get out of the kitchen. Please.
You’re welcome.
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