Monday, May 25, 2009

The road ahead

Between Bush's $750 billion TARP and Obama's $787 billion porkulus bill, the credit of the United States has been pretty well used up. The government won't be able to do another big spend, the money is gone and it won't be able to borrow that much more.
Too bad that neither seem to have helped the real economy. The real economy is 70% consumer spending. Until consumers stop worrying about getting laid off, they aren't going to spend on anything except groceries. The car companies are in the tank because car sales dropped from 17 million new cars per year to 10 million new cars per year. Why the drop? Simple. People worried about loosing their jobs don't buy new cars.
With the economy in the tank, require new cars to get 35.5 mile per gallon. That's are real sales killer, pay more for smaller cars.
With the economy in the tank, increase the amount of money going to health care. right now 16% of GNP goes to health care. Offering free health insurance to everyone will jack that up. Health care costs slow the economy, they don't grow it.
With the economy in the tank, propose a giant fuel tax, aka cap and trade. That ought to cut another whacking big slice off the GNP.
The future don't look good. And Obama is making it worse.

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