President Obama has moved so aggressively to insert the federal government into your life that we are already seeing the signs of stagflation. Why would you start a new business when he is already talking about raising taxes on small business? Why would you risk your savings when you know you will have to pay your share of the ballooning deficit before long? Why would you buy that new car, computer, or refrigerator when your savings are evaporating? To add insult to injury, you are criticized for saving too much. But isn't it prudent to save when your job isn't safe and your retirement account is all but gone?
The Democrats see the economy as a black box. They seem to think that if you inject a certain amount of spending into the box, you get a certain level of GDP out the other end. This is a form of static analysis that doesn't work well even for small amounts of spending, let alone spending in the trillions. It is just as bad as the static analysis that is behind Democrats' objections to supply side tax cuts. Both ignore the way government actions change free citizens' behavior. Right now, we are feeling a bit of an Atlas Shrugged effect. This economy will not improve until Obama's spendorama and socialistic programs alienate enough people that they elect a Republican President and Congress who pass a large tax cut. Until then, save what you can and take care of each other.
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