Obama’s fear mongering is well documented. Crisis, catastrophe, “since the Great Depression” and similar terminology are part of the plan to push through Obama’s agenda. But do the words cause economic harm, or are the words merely a reflection of a declining economy? In other words, which came first, the economic chicken or Obama’s policy egg?
The evidence is in. Obama’s fear mongering is part of the problem, not part of the solution. There is no lack of money in people’s pockets, but people are saving the money not spending it.
This from a Marketwatch summary of the Commerce Department’s January 2009 report showing that disposable incomes are at a 14-year high even though total income is down:
U.S. households socked away most of the extra income they got in January from annual cost-of-living raises, boosting the personal savings rate to a 14-year high, the Commerce Department said Monday.
Disposable real incomes rose in January at the fastest pace since May as annual pay raises and cost-of-living increases took effect, the Commerce Department said. Real disposable incomes (adjusted for inflation and after taxes) increased 1.5%, despite the third straight decline in income from wages and salaries….
With disposable incomes rising faster than spending, the personal savings rate rose to 5%, the highest since March 1995. At an annual rate, personal savings rose to a record $545.5 billion….
In the past year, real disposable incomes have risen 3.3%, while real spending is down 1.6%.
In other words, people are saving more and spending less. Why would this be? Fear stoked by this administration.
We don’t need massive government spending to get this economy moving. What we need is to invigorate confidence in the economy through rhetoric and policies which free up the private sector, and give people the confidence to resume normal economic life.
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Comments
And wasn’t a major talking point for voting for Obama that he would enlighten us all with the power of his rhetoric?
“There wasn’t a recession until the credit system was hit with massive, coordinated withdrawals in October.”
That’s one opinion. Here is another:
http://www.reuters.com/article/businessNews/idUSTRE4B05YX20081201
“The NBER said its committee looked at payrolls, which peaked in December 2007 and declined in every month since then, as well as real GDP and other data to determine when the recession started.”
And to be honest, I don’t even know what “enlighten us all with the power of his rhetoric” means.
The NBER waits until the economy shrinks and then looks backward to find the last time the economy grew most quickly. If the economy had not begun shrinking, the declining rate of growth would not have been included under their label of “recession”. The most important point is that the economy would not have dropped into negative growth if the credit default swap system had not been hit with sudden, massive withdrawals, and then there would have been no recession.
And I remember hearing over and over that Obama would use the power of his words to heal the oceans and the blind make liberals proud to be Americans once again. Well, I suppose he actually did that last one.
“I remember hearing over and over that Obama would use the power of his words to heal the oceans and the blind”
Funny – I don’t remember that at all … and I followed the election pretty closely.
Perhaps we live in alternate universes.
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