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Wednesday, July 1, 2009

Stagflation

I saw this article about stagflation linked to over at The Survivalist Blog.

It is just a load of good news.

From the article:

An economic train wreck is coming. Its cause is simple and straightforward: the breathtakingly bad monetary and fiscal policy during the past six to nine months - in other words, too much money and too much federal spending.

What to do? The answer from the article:

The first thing policymakers need to do is to stop doing harm. The Fed needs to immediately raise the federal funds target interest rate and slow money growth to normal levels. Congress needs to return federal spending to a more normal 19 percent to 23 percent of gross domestic product. It should reduce the U.S. corporate tax rate, currently the second-highest rate among industrialized nations, and, if possible, reform the tax system to promote work, savings and investment. Finally, it needs to control rather than exacerbate federal entitlement spending.

What is the current administration doing? From the article:

Instead, the Obama administration seems bent on doubling down and making a bad situation even worse with massive increases in business and individual taxes, nationalizing or taking control of major industries (including automakers, banks, insurance and health care), hidden but huge energy-cost increases in pursuit of the chimera of global warming and ever greater entitlement spending. The Congressional Budget Office recently estimated the Democrats' health reform plan would increase federal spending a further $1.3 trillion over 10 years.

I think the socialized medicine plan will cost much, much more than the CBO estimate.

Hold on tight folks. The fun isn't over yet.

2 comments:

The Hermit said...

Ever day it seems like things get worse. The storm on the horizon is close enough now to see the lightning.

Bitmap said...

I wish you wouldn't say things like that.

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