I just thought I would send this information out as so many are still worried about the economy and some are worried about what the new president is going to do, so I thought I would send out some facts to put todays economy in persepective.
“During the Great Depression, U.S. output plunged 27% in four years; unemployment neared a third of the work force. Real private investment shrank 87% in three years; personal spending plunged 41%.”
“Then we had over 25% unemployment; now it’s 6% and could move somewhat higher, which is typical for economic corrections. Then, by 1934 about one-half of mortgages were in default, today it is only 6%. Nearly 94% of homeowners are still making their monthly payments.”
Ok, so while many are saying just how bad things are and you might think no one in the big auto state of Michigan has a job, it’s very over-reported. The US is slowing but not grinding to a halt that some on government are telling us. Why is this so ? Well, let’s look at these quotes:
“Since 1980, real per capita GDP has expanded 69.2% in the U.S. vs. 65.6% for the EU 15. Why? Our productivity is greater. In just the last 10 years, U.S. productivity has expanded 2.5% a year, with Europe growing nearly a full percentage point less.”
“Even after our stock market and housing losses, the U.S. is still extraordinarily wealthy. In the second quarter, Fed data show, the U.S. private sector owned $110.6 trillion in assets — an immense amount of wealth.“
Despite the government looking to take over everything and the market dropping by 50 percent, the US is still the world’s asset powerhouse and blowing by all of europe combined.
But, lets put what happened in the US market in perspective of the most recent recession:
“The “peace dividend” resulting from sharp cuts in defense spending helped Bill Clinton achieve a balanced budget. It was the new age of the Internet, biotech and high tech stocks. For nearly five years, prices on the Nasdaq soared. Indeed, to its peak the Nasdaq increased 2 1/2 times what the Dow Jones industrials did during its 1920s climax run.But those astronomical Nasdaq price gains culminated in the Clinton stock market bubble, which burst in early 2000. Within the space of months, an estimated $8 trillion in U.S. stock market wealth was erased.”
You see, despite everyone crying to stock up on food and learning to darn their socks; the US went through equally the same loss just 8 years ago and survived. Now, how did the US survive:
“The reason we shouldn’t have another 1929 is our Nasdaq composite (the stock index that includes America’s modern-day entrepreneurial leaders) already had its 1929-like break in the three years from 2000 through 2002. Since then it put in a strong five-year recovery up to last November. That recovery was due to the broad-based, and highly successful, tax cuts pushed through by President Bush in 2001 and 2003. We are now in the midst of a normal cyclical market correction, with the economy having created 9 million jobs since the 2003 tax cuts.(not bad for someone generally considered an idiot by many)”
Now, many will tell you that continuing tax cuts will not spur the economy again, but what they either don’t know or will not say is that despite the Bush tax cuts, US corporate tax rates are still one of the highest around the industrialized nations. The best way for the US economy to keep rolling is to apply the same Bush tax cuts to corporations and small businesses.
Now, this is a tall order considering who will be in charge in January and most likely won’t happen. So, the US is most likely to muddle along rather than create another 9 million jobs that the Bush cuts created, but the facts should show here that the US will be allright and will even prosper despite Obama. The US still takes a back seat to no one on productivity and capital to spur economic growth.
Sources:Talking Ourselves Into A Depression- http://www.ibdeditorials.com/IBDArticles.aspx?id=308530374766527
A Replay Of 1929? Don’t Count On It- http://www.ibdeditorials.com/IBDArticles.aspx?id=307927474219610