As Obama calls for the passage of more spending bills in order to continue his economic rebound unemployment continues it’s downturn and our second quarter GDP has sunk to maybe it’s lowest level in the past year. Ironically, as Obama praises recovery, Biden continues to blame the recession on Bush.
AP: “Together, the reports raise doubts about whether employers will hire enough and consumers will spend enough to invigorate the economy. As unemployment remains near double digits, Congress could feel pressure to pass more stimulus measures to speed the recovery. So far, Republicans and some Democrats have blocked additional spending because of their concerns about the size of the deficit.”
Prior to this quarter companies invested in equipment taking advantage of their last opportunity to use tax credits. Home buyers did the same. Empty inventories were replenished for what might be the last time in a long time to come, consumer spending is next to nil.
It seems like all of the Obama solutions are suddenly backfiring just before the November midterms. The Gulf moratorium has induced rigs to leave and production in America is suffering yet the oil cannot be found. All of the stimulus spending created nothing but a need for more spending. ObamaCare is costing more than we were told before it is even implemented. In the end each of these creates more unemployment as well as higher deficits (taxation for everyone).
We have spoken about the sunsetting Bush tax credits and what will become of them. The idea of retaining only those which apply to incomes below $250,000 must take two things into account, what percentage of that sector do not pay taxes and how much will new changes (child/marriage credits…) cost everyone? Those making more have a large percentage of companies filing under their personal taxes and will be susceptible to the same regulations as all individuals.
The big decision in front of Obama is whether he continues to push for increased taxation in this economy. Today’s Fox poll shows 62% feel America is in decline. There is no indication of recovery and they do not want a tax increase. What would it do to our fragile economy?