And Now We Shall Witness The Economic Self-Fufilling Prophecy

by Doug Quance

Associate Broker

Author website

How Government Leaders Do More To Harm The Economy Than Help It

Just in case you haven’t heard – this is an election year. And as is all too common, we hear about how this is the worst economy is the last [fill in the blank] years.

It’s becoming a mantra you can almost set your clock by.

Well John Q. Public – who, by and large, is relatively secure in his job and career – is always concerned about “the other guy”. And when the media repeats the “bad economy mantra” like an annoying parrot – John Q. will often slow down his discretionary spending.

So now we see the Presidential candidates tripping over themselves in an effort to put forth an economic plan that is supposed to save us from a recession that none of them can prove exists nor prove is forthcoming.

What we do know is that a big chunk of our collective change went overseas to pay for oil – and for many Americans, that cut deep into their discretionary funds. At $60 a tankful, the cost of gas is putting the hurt on many of us.

The increased cost of transporting goods has inflated prices, as well. And yes, there is a housing crunch that is hurting the hell out of everyone I know – and one of the Presidential candidates is now calling for a 90-day moratorium on foreclosures.

Does that automatically mean we’re heading for a recession?

No, it doesn’t.

Hey, I’m not saying we don’t have economic problems that need to be addressed…

Meanwhile, the world watches us as our political “leaders” squabble over this apparent impending doom that is upon us… and since we’re the biggest market on the planet – they are getting freaked out.

After all, it was only a few weeks ago that the Iraq war was our biggest issue of concern. Since things are going better in Iraq – it’s now the economy.

And when investors get spooked – they tend to grab their money and run.

That is what is happening right now.

The foreign markets all tanked today. Down about 5 – 7% across the board.

On Tuesday morning we are likely to witness a big drop in the U.S. stock market. Sell orders are being placed before the markets open. If cooler heads do not prevail – we might see the biggest single day drop in U.S. history.

Then again, if the big money steps in – the markets could stabilize. That’s a big IF.

The mantra will continue – and the willing media may help steer us into a recession.

My dad used to tell me that there’s not a lot the government can do to improve the economy – just a whole bunch of ways they can screw it up.

In reality, the Chairman of the Federal Reserve has more power over the economy than any politician. But that is not where the obstacles are usually found.

We have the second highest corporate tax rate in the world… so in this global economy, many companies move their operations overseas – meanwhile we get lip service from the politicians about how we need to close the loopholes that reward companies for doing so.

The loophole is LOWER TAXATION and FEWER REGULATIONS on foreign shores.

These politicians flap their gums about the evil corporations – but it is the politicians who create the conditions that make those corporate decisions so easy. Corporations don’t pay taxes. People pay taxes. Corporations collect taxes from their customers and clients and deliver them to the government. People pay these taxes in the price of the goods and services they purchase.

You want to see the economy flourish Mr. & Mrs. Politician?

Eliminate corporate taxes. That alone will help make our products more competitive on the world’s stage. Our companies need all the help that they can get, since they pay some of the highest wages in the world.

You want your tax money? Quit hiding it in the price of a loaf of bread.

And stop talking about this being the worst economy in your lifetime – ’cause while you might have been stoned to the bone in the 60’s… even Cheech & Chong couldn’t deny the economic malaise of the 70’s.