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November 3, 2008

The Fragile Economy and the New President’s Best Move


The new president can either shorten or prolong our newly entered recession. Yes, we are in a recession both mentally and technically.


The mental recession started as soon as the Democrats took control of Congress at the beginning of 2007. They needed the economy to tank to help their mission of increasing their control of Congress, and trying to disgrace President George W. Bush.


The Democrats who control Congress have kept their promise of a “new direction”, but most people did not know it meant backward instead of forward, just as most people voting against anyone Republican are ignoring the fact that Democrats control Congress, which has earned one of the worst approval ratings in history.


The start of the technical recession was officially announced last week by the Commerce Department. They reported that the gross domestic product (GDP) fell at an annual rate of 0.3 percent in the July-September period.


It is highly unlikely that we will avoid negative growth in the last quarter of this year (October-December) given the current financial crisis. Thus, we will experience at least two consecutive quarters of negative GDP growth.


We are not, however, in an economic depression as many reporters in the mainstream media and congressional Democrats want you to believe. Our nation’s financial situation is indeed fragile, but the unprecedented steps by the Bush Administration will help stabilize things if the mainstream media, the Democrats in Congress and the new president give them time to work.  


Since the beginning of the financial crisis, the stock market has exhibited some extreme volatility, but finished the month of October with an overall 14 percent decline as measured by the Dow Jones Industrial average. That pales in comparison to the over 80 percent drop in stock prices during the great depression.


But the new president could put us into a prolonged recession. If he approves legislation to increase taxes, increase regulations on businesses or approve further increases in federal spending, he will have replicated the steps taken by FDR and the misled Congress of the 1930’s.


Those actions drove us into a deep and prolonged economic depression. That’s why we call it the Great Depression, in a bad way, not in a good way.


The new president’s best economic moves for the next two years would be to do nothing except for one thing: Eliminate the automatic repeal of the current tax rates. If he does not convince the Congress to do so, the new Great Depression will be unavoidable.


One only has to take off their “who to blame” glasses and objectively examine the current economic and financial crisis. Sadly, the current congressional leaders are objectively challenged.


The new president will not be the choice of approximately half the voters, because of another close presidential election. However, the sooner we get through the disappointment if our preferred candidate does not win, the sooner we can start focusing on the will of the people, which is and has always been to move forward.


Let’s pray that the new president does not have a new definition of forward.


Congratulations Mr. President! Let’s hope so.    


© 2008 North Star Writers Group. May not be republished without permission.


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