So, how is the recession doing? Some say it has improved. Albeit, a majority of these are Obama fans. Some say it is lingering on. Albeit a majority of these are Obama haters. So to find out where the recession stands you have to consider the statistics.
Yet stats are all over the place too. The unemployment rate continues to be 9.7% in the U.S. It is up to 14% in Shoreline, Michigan, and in Detroit it's just under 30%. Every week you hear reports of 100,000 more folks who sign up for unemployment.
However, some jobs are created. Albeit, a majority of those jobs are those temporary type that are created by the stimulus. I think it is these jobs that sort of make the unemployment number look better than it really should.
Another thing that makes the economy look pretty short term, or as though it's getting better, is the fact that the Bush tax cuts will expire in 2011. It is for this reason that many experts are calling for the recession to look like it's getting better until 2011, when it will collapse.
This is the prediction because any businessmen who have any money to spend are doing it now, before their taxes go up. This is making the numbers look "falsely" good. Thus, since they know their taxes will go up, they want to buy what they need now before the hike.
Then, once the Bush tax cuts expire, and the American people feel the largest tax increase in the history of the United States (which is basically what will happen), Americans will stop spending altogether. A true recession will occur. A real crash might come. A depression maybe.
Albeit, this is the prediction of some. Albeit some disagree with this, and say the recession is getting better. Obama recently even went as far to say, "We might come to expect a high unemployment as the new normal." He says this as though he's accepted economic mediocrity.
Historically speaking, he may be looking back at FDRs history, where the unemployment rate was still 15-20% nine years into his term. Back then, the tax on the upper class was nearly 90%.
If you look at stats, the unemployment rate didn't start to soar upward (it was less than 5% when Obama was elected), until after Obama was elected. It went up because bosses started letting people go because they expected Obama to raise their taxes, which he did. They knew if they wanted to make a profit, they'd have to make cuts now.
Right now we have 6 million American workers who have been unemployed for more than 6 months, and may never get their jobs back. This has not happened since... the Great Depression. A grim statistic for those who think the economy will recover under Obama.
In 1983 long term unemployment was 26%, and we pulled out of that recessin after, you guessed it, tax cuts. In 2010, this long term unemployment rate is 44% of the 15 million unemployed.
The Seattle Times, in this post, quotes Fed. chairman Ben Barnanke, who said, "I'm particularly concerned about that statistic, because long spells of unemployment erode skills and lower the longer-term income and employment prospects of these workers."
History shows, taxes determine the rise and fall of the economy. I've written about this over and over on this blog. See economics 101 tab above.
The people of the U.S. know this. Americans are not stupid.
Recently a poll was done by Rassmussen in which 75% of Americans think they are being taxed too much. When people think they are taxed too much, they don't spend, it's historical fact.
If history is any indicator, I think the high government spending, and higher taxes, will stall the economy even more. Thus, if Obama wants to get the economy rolling, he best cut taxes, cut spending, and, thus, encourage inventors to invent, and investors to invest.
Albeit, I don't think that's his plan. Thus, it's quite possible a greater recession is on the horizon, and perhaps even a depression. As a humble American I hope not. Albeit history tells no lies, and history also predicts the future, especially when one fails to heed it's wisdom.
As you can see by this Wall Street Journal post, it was not FDR who ended the Great Depression, it was tax cuts after WWII was over. The author notes FDR created "road blocks" to recovery, just like Obama is doing.
Albeit this is one opinion. Albeit a wise one.