It's the central tenet of the democrat religion that "big business" is the problem. Nevermind that the US was formed out of fear of central government. Obama is now trying to trick the foolish masses once again by suggesting that he has made a shift. Hints of tax cuts and spending freezes are a ruse. The battle cry of this admin is still to attack business. He has merely shifted the target from insurance companies to financial institutions. All the while the real culprit and the real danger is ever-increasing government.
All the jobs being created? Only in the government. And this morning we are told we should be happy that the fourth quarter GDP was up. But in fact, much of the rise was due to government spending which is of course, not sustainable. The rest of the rise was due to inventory restocking which is also not sustainable.
The economy is strong because of business, and it is staying alive in spite of the blows it is taking from this administration. But if it were not for the wasted year of Obama, we would be well into a real recovery now instead of this phony, artificially stimulated jobless pseudo recovery.
I am a liberal and am very pro business. The thought that somehow we on the left demonize business, is akin to everyone on the right being lapdogs of business, it is just name calling, we all know whose names are on our checks (even if you own a small business you get checks from other businesses, no man is an island).
Everything that has been done to this point is almost exactly a text book maneuver.
GDP= C(consumption) + I(business spending) + G (government spending) + (exports - imports)
GDP (Drops by 5%)= C (Down 3%) + I (down by 2%) + G (unchanged at this point) + (E-IM).
To get GDP back to 100% we don't consume as much because we are losing our jobs, businesses start to cut spending and jobs to stay operational, exports start to rise if the dollar drops in value, but these changes are not huge.
So if the government stays unchanged,
GDP (Drops another 5%) = C (Down another 2%) + I (Down another 3%) + G + (E-IM)
So now youre in the downward spiral, businesses are cutting left and right, which lays off people, so they tighten up spending as they are afraid to lose jobs, so that impacts businesses more, on and on.
Lets look at one more cycle and start to get government involved and a increase in net exports(from previous levels).
But GDP (-12%) = C (-7%) + I (-8%) + G (-) + (E+IM(+3%))
The government finally gets involved and kicks up 5%, C and I continues to dip because they are still clenched.
GDP (-10%) = C(-9%) + I (-10%) + G (+5%) + (net exports +4%)
Still not affecting the spending decisions of C and I the government kicks in another 5%.
GDP (-7) = C (-10%) + I (-11%) + G (+10%) + (E-IM +4%)
Finally businesses have gotten through all their excess inventory, consumers have stopped worrying that they are next on the chopping block and start to peak their heads out (even if that means they haven't changed spending yet), So now the businesses need to restock and start to buy new materials and goods/services, which mean the people will slowly need to be hired back, so the system starts to right itself.
GDP (-5) = C (-10) + I (-9%) + G (+10%) + (E-IM +4%)
Continues to get a little better, people start to get hired and that money gets back into the system, Net exports start to decline again because our dollar starts to increase in value(in respect to other countries currencies).
GDP(-2%) = C (-8%) + I (-7%) + G (+10%) + (E-IM +3%)
The government is still spending but as GDP goes to normal they can start to scale back, but if they just dropped it to zero it would not be good:
Gov't drops to zero as country is recovering:
GDP (-10%) = C(-7%) + I (-6%) + G (0)+ (E-IM + 3%)
Basically right where the recession started. So really what needs to happen is they slowly decrease it as people come back into the market.
GDP (-1%) = C(-7%) + I (-6%) + G (9%)+ (E-IM + 3%)
As the recovery continues C and I keeps increasing, G backs off a little more, Net exports drops a little again.
GDP (-1%) = C(-6%) + I (-5%) + G (8%)+ (E-IM + 2%)
GDP gets back to normal levels, the import/export imbalance is back to normal.
GDP (0%) = C(-4%) + I (-3%) + G (7%)+ (E-IM + 0%)
And we are almost back to normal, at this point the government can fully pull out and not screw everything up.
GDP (0%) = C(-2%) + I (0%) + G (2%)+ (E-IM + 0%)
Pulling out is always the hardest thing to do in life, too early and you may ruin everything you have tried to accomplish, and too late and she ends up pregnant. Errr I mean too late and government becomes an anchor around our necks.
Crazy part is once it is back to normal you can cut the spending and increase taxes to build up the surplus (like clinton did) to get the government ready for the next economic cycle.
Most presidents have not gotten this last part, but if you listened to Obama, although he may use more populist language, this is essentially what he was saying he wants to do. This 'spending freeze' in 2011 is just the government pulling out when everything should be back at a stable level, the tax cuts are another way government can keep more money in the system so consumption increases and it is easier to repeal later when the system is fully stabilized and there needs to be a pull back on growth (to lengthen the times between booms and busts).
This is a very generalized model, there is a lot more into it, but this is essentially what is going on, and shows why he has done what he has to this point, and what they are planning in the future.
Reagan is the only one who got it right.....
His Presidency is still the peak of economic success for the country so far. No one has come close to him.
lol right, two recessions, the highest unemployment rate since the Great depression, spending over 8 trillion dollars on nuclear warheads, Surrre.
But your right nobody was able to surmount those accomplishes I just mentioned. Bush got the two recessions, but fell short of unemployment.
) anything....it just takes a big cut of the money and piddles out a small return. Just look at any govt. program.