Wednesday, November 25, 2009

Washington Must Get Out of Our Lives So We Can Work and Produce Again

The uncertainty caused by this administration is what will hold back the great American engine of productivity. We the people don't know what to expect in the near and long term future what with looming dual monstrosities of the Health Care Bill and the Cap and Trade bill with its carbon tax, not to mention looming inflation, that are poised to siphon off our wealth. This uncertainty causes paralysis resulting in people hoarding their money (those that still have jobs) instead of investing and buying. The good thing is that we're learning the lesson that savings are important. At the same time, an economy that doesn't move forward because of political uncertainties can be disastrous for a nation. Our politicians have to GET OUT OF THE WAY and leave us alone to work, invest, purchase and save as we deem appropriate for our own life - not based on politicians' expediency of the minute decision. WSJ has a good piece about our "hangover".

The panicked Democrats' biggest problem is that Congress and the President have erected the biggest overhang of economic policy uncertainty that anyone can remember.

One big difference between Washington and private markets is that politicians think everything they do is free-standing. Markets, however, combine all the potential costs of Washington's policies and then decide whether to invest, or not. Consider what private decision-makers see in their future:

A 2,074-page, trillion-dollar health-care bill to redesign 17% of the U.S. economy. A carbon tax—cap and trade—that remains an Obama priority ahead of the Copenhagen climate summit next month. A falling dollar and gyrating commodity prices, with no idea where those prices will go next.

Democratic liberals are talking about an income tax surcharge to pay for any commitment in Afghanistan. Card check, to expand unionization of the private economy, remains a priority. Domestic discretionary spending in fiscal 2010 is set to rise at 12.1%, with inflation near zero.

Nurturing a fragile economic recovery into a durable expansion requires policies that restore public confidence and reassure investors, risk-takers and employers. The Democratic agenda is doing precisely the opposite, which is how you get subpar growth and fewer new jobs. (READ AT WSJ)

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