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Heading for an Obama Depression???

Posted by rightwinger on November 12, 2008

Since it was announced that Obama won the presidency, the stock market has done nothing but go down.  The Monday before the election, the stock market went up a little on the hopes that McCain might still win.  Once it was announced that Obama won, the stock market has tanked ever since.  When Obama had his first press conference he would not answer the question as to whether the top 5% of people would still have their taxes raised.

Many don’t remember that when Bush took office he inherited a Clinton recession.  Most people have forgotten this fact.  In the Spring of 2000, the stock market crashed when the dot com bomb hit.   Because of this a trend started where people started buying bigger fancier houses and investing less in the stock market.  Also the house flipping trend came on the scene.   This was the beginnings of the Housing bubble.  Seven months after Bush took office, the US was attacked on 9/11.  We were lucky due to Bush’s economic policies not to go into a deep depression.  Bush is tax cutter which allowed the market to bounce back.  Obama is a government spender while raising taxes on corporations which hinders free market growth.  We are looking at an Obama Depression.  I hate to say it, but if he continues down this path of higher taxes while the economy is struggling, it will just get worse not better.  Free markets work and we need to let them correct themselves.  Herbert Hoover decided to increase taxes (Revenue Act of 1932) during a recession which simply made the economy worse.  Do you remember the Great Depression???

And then there’s this: The 2008-09 recession may actually be far nastier than its 1990-91 twin. Every day, Wall Street forecasts worsen. Jan Hatzius, chief U.S. economist at Goldman Sachs, expects a jobless rate of 8 1/2 percent by the end of 2009 and drifting a bit higher in 2010 for the biggest cumulative rise in unemployment since the Great Depression. And over at JP Morgan Chase, economists are predicting the economy will shrink 4.0 percent this quarter and 2.0 percent during the first three months of 2009. And on top of all that, you have the $7 trillion of lost national net worth. (Think higher investment and business taxes will help?)

Obama’s election is often compared to that of Ronald Reagan’s in 1980. Both gentlemen were voted in to fix an ailing economy. But the 1982 recession took a huge chunk out of the Gipper’s popularity. He had just a 35 percent job approval rating at the start of 1983, just two months after Republicans lost 27 seats in the House in the midterm elections. But Reagan’s presidency was saved by an amazing economic rebound. The economy surged at a 4.5 percent pace in 1983 and at a mind-blowing 7.2 percent clip in 1984 as unemployment dropped from a high of 10.8 percent in December 1982 to 7.2 percent in November 1984. The Long Boom was underway.

Reagan worked his magic with tax cuts. Obama is trying to do the same with government spending. But stimulus packages are only supposed to keep the recession from getting worse or morphing into a mini-depression. I don’t think anyone expects that $500 billion in hot money to return America to prosperity. Only time (and the private sector) can do that, especially with a downturn caused by a credit crisis and deflating asset bubble. And four years may not be enough time for the Obama presidency to traverse that long road or complete that steep climb.

Read the article for yourself.

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One Response to “Heading for an Obama Depression???”

  1. […] America goes into another Great Depression; […]

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