Friday, July 10, 2009

Stimulus futility

Time for an exercise in futility.Develop a realistic alternative to the upcoming 2nd Obama stimulus.Now,coming up with the plan isn't hard.Getting Congress to implement anything actually geared toward helping the economy is the futility.

We have over 27 million small businesses in the U.S. which have generated an average of between 60-80% of all new jobs annually over the last decade.Yet this is the area of the economy left out in the Obama stimulus.Small businesses generally account for roughly half of all private sector employees.Of course,once they become successful enough,they grow into a large business and are no longer included in this category.Over 99% of small businesses have less than 500 employees.

This is without question the key to any economic recovery.Private sector,small businesses are the lifeblood of our economy.Big corporations play an important role,no doubt,but they are small potatoes in the overall economy.As are Government jobs at least for now.If Obama has his way,they will dominate our economy eventually.

There are endless breakdowns and analysis of who pays the most taxes.Only Liberals live in denial that the top few percent of wealthy Americans pay the bulk of all income taxes.These same people own and operate these small businesses.Thus,a tax break for them translates into growing small businesses,additional hiring,more investments,etc.

An across the board tax cut,ala Reagan,is the proven method to economic recovery.However,the increased tax revenue created by reducing tax rates creates the problem.Congress will have at their disposal all of this additional money and to complete the cycle need to exercise great restraint and not spend it on growing Government.How do you pull that off with the hacks running Congress today?

At the end of the day,an effective stimulus is virtually impossible because of this.There are also massive attempts to expand regulation at all levels of Government as a lack of it is being blamed for the recession.This 1-2 punch will stunt any recovery.Throw in the Federal Reserve and Obama's social agenda and there's no chance.Our economy has proven amazingly resilient over time and able to bounce back from recessions without any intervention whatsoever.It would have in this case as well.

The only solution is to remove the anchors holding back recovery.The first opportunity is the mid-term elections.Step two is to make Obama a one term President.Only then can any real attempt at recovery begin.How far will we have fallen by then?Can we afford to wait several years to even start repairing the damage?I vote for a revolution right now!More to come...

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