3/05/2009

Yes, It Can Get Worse...and I Think it Will

How did people feel in the fall of 1929? Things were getting shaky well before the great crash of late October that launched the Great Depression. But most people thought things would quickly straighten out.

Since it became apparent that Mr. Obama would win the White House late last September, the stock market has declined more than 4000 points. The decline has accelerated since he took office. Banks are failing at a rate of two per week, and the many of the ones that remain in operation are technically insolvent. (UPDATE: Today we found out that the FDIC has asked Congress for 500 billions dollars to cover more bank failures. That's billion with a b--half a trillion bucks!) Unemployment is rising. And the President wants to go in the red nearly two trillion dollars in the next year alone...and our freespending Congress is quite likely to oblige him.

Things are bad, but they can get a lot worse.

Just as FDR's New Deal deepened and lengthened the Depression, Obama's massive government expansion and tax increases will strangle any recovery. The open question is whether he intends to destroy the economy to force greater dependence on government or if he is just completely clueless to the way the real world works. Trillions of dollars of wealth have vanished, but trillions of dollars of debt remain. This could well prove to be a major economic collapse; and perhaps even a depression.

In evaluating the current situation, remember this historical fact. The stock market collapse of 1929 was the beginning of a long term trend. The Dow Jones Industrial Average did not regain its 1929 price level until 1954. How does 2032 work for your recovery plans?

1 Comments:

At 5:16 PM, Anonymous Rebecca Aguilar said...

You will be 70 years old in 2032. Do you think you will be receiving SS benefits or will they have vanished away like a vapor?

 

Post a Comment

Links to this post:

Create a Link

<< Home