StrangerThan
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Joined: 4/25/2008
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From the sound of it, looks like more stimulus is in the works.
http://news.yahoo.com/obama-says-gop-must-back-us-first-create-182721246.html
Which explains the preview targeting the GOP, given that borrowing more money pretty much flies in the face of the last couple of months. The article also notes that his speech "marks a departure from long term deficit reduction." That would be a no-brainer if stimulus is indeed in the works.
Also on the table, the temporary payroll tax cut. Don't get me wrong, I'm probably in the boat with most people and like more money when it comes paycheck time, but seems this one is cutting Social Securities throat, and as I noted once before, like the Bush tax cuts, this one is also going to feel like a tax hike when it comes back.
So far, nothing new. We're heading into fall. From a personal perspective, the economy slows fall and winter. That's from family businesses that see a drop off, and from the work I do. Consulting work, at least the kind I do, usually runs fairly strong up to about Thanksgiving, then drops off into Christmas. The first quarter can be iffy, but the last three years it's been hit and miss. That makes August's job numbers look like a stop sign on the road to recovery.
A few things: consumer confidence and spending are two of the engines that drive the economy. There is nothing here that gives me a lot of confidence. We will get a brief surge in jobs in November and December from holiday hiring. Wall Street will probably have a few good days based off that - something I've never understood since they're obviously not long term jobs, nor particularly good jobs. From what I read, credit remains tight even though financial institutions and large companies are sitting on unprecedented levels of cash. The national trend the last couple of years for families has been one of reducing debt and saving. I don't see anything here that's going to change that perspective.
The credit rating agencies made a strong case for the US to get it's fiscal house in order. We'll be under review again before long. If we hit another downgrade from borrowing more, we're looking at potentially hundreds of millions more in interest to service the debt we have.
Here;s what I think.
Another round of stimulus will let the economy limp along. The last one created jobs, but made no dent in the unemployment figures. Someone needs to explain to me how stimulus creates jobs, and jobs data has indicated a plus on the jobs side for most of the year, yet unemployment has remained at what amounts to the same level. It doesn't make sense in any equation I've ever worked. Where is the blood being spilled?
Republicans need to sign on to the payroll tax cut. Opposition to it makes little sense. I understand that tax breaks to business holds the potential of being much more of an economic shot in the arm, but folks need money to spend at the same time. A great business with no customers fails just as often and quickly as a bad business people don't frequent. The key is getting people in the door, and they need both to feel more confident and have the money to spend.
Which leads to the figures on inflation. I understand core goods not changing much. Like someone yelled at a conference an Obama official held last year though, I can't eat an Ipad. Where those numbers hurt most are older folks. Anyone who buys groceries and fuel knows that cost has risen over the last few years, but SS payments haven't. A lot of folks like to call SS an entitlement. If I were drawing it right now, I'd be more like, just give me my friggin money back that I gave you to ensure my future.
None of the items Obama has previewed will create sustainable jobs. They're temporary in nature. What I don't see yet is anything to really inspire confidence in the economy or to tempt financials and large corporations to spend. It's just not there. Maybe that will come, but so far, I don't see it.
Mostly what I see is politics.
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--'Whenever you find yourself on the side of the majority, it is time to reform' - Mark Twain
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RE: Job, jobs, jobs - 
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