Jon Hilsenrath tells the story, though with great things left unsaid. The drop in Consumption cannot produce Job growth in the Private sector. One has to understand, though, that there is Consumption and then there is Consumption. We don’t need to use more Oil products. We don’t need to buy more foreign cars. We do need to buy more American production. We do need to have more Americans providing Services to Americans. We don’t need more Tax Credits to Business in order to sell foreign products to Americans. There is even One, namely myself, who believes in the old Tariff system to somewhat restrict the sale of foreign products, from which We receive neither Taxes or significant American wages.
Paul Krugman is worrying about a Double-Dip in the economy. He should of been worrying before the federal government spent a trillion dollars on only that which protected the wealth of the Banks and Brokers. I personally live in an area which has much less unemployment than the rest of the Country, but local Sales are way down because Everyone is worried. The real difficulty is convincing Consumers to take on future financial commitments. A real element of all this is the split in Inflation readings; the federal government is satisfied with the inflation rate because Prices have decreased in anything connected to the Credit Crisis. A check of Grocery or Discount house reflects a high Inflation; all of this within a spectrum of no Wage growth. The government can fool itself, but never the American housewife. It is exactly these people whom We have to convince that more money is coming.
Here is the opening shot of a great war, but be sure to wear Rain gear; the BS will fly in massive amounts. There will be Protection of lobbyist position and advantages, incited Terror among Seniors, and about as much overall help as Americans received in passage of the Proscription D program in Medicare. All the Health Care providers will raise their rates by another 25%, and Consumers will pay what they had before, while the health care industry gains a massive Welfare program. The real Question will be how long will it take to fix whatever mess is initially enacted. It will get fixed, as Americans get mad at what they have been stuck with, though it will be a long process where the health care industry will make a fortune in the decade of disaster ahead. lgl