Thursday, August 18, 2011

The Good People of America Will Have to Ask Themselves That Question

What if I told you that the recession is being caused by a lack of purchasing power? Would you ask what does purchasing power have to do with a recession? If people are placing more money into the operation of their vehicles, then how can the consumer maintain previous levels of demand for goods and services if incomes have remained stagnant? There are only so many months that the consumer can continue to spend discretionary income on goods and services, and the high price of gasoline, and still not drive his personal finances into the ground. How much debt can we bare?

Now to compare the debt of a country like the United States to the budget of a family of four is just plain stupid. Governments during periods of recession or depression can borrow and put people to work building infrastructure. This places cash money into the economy and creates demand for goods and services. This concept should not be too hard to grasp. The history of the United States includes periods where the Federal Government put people to work by building and replacing worn out infrastructure. The only thing stopping the country from doing this today is politics. The economics of this enterprise is sound. What remains is the political fight to destroy the first black president, and try to turn him out of office in the 2012 elections. This may happen, but his replacement will be looking at a recession or depression and the economics will not have changed. The only difference between doing it now or in 2013 is that more people will have suffered needlessly and more people will fall from the ranks of the middle class. Is it worth hurting so many people and making so many children suffer to defeat one black president? The good people of America will have to ask themselves that question.

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