These are the times that history books and case studies will be created. The younger generation will reflect back and ask what it was like living in the booming 80’s followed by the Great Recession. We will be able to tell them about the dot.com bubble, the housing bubble, the speculation bubble that drove energy prices to new levels, the rampant foreclosures and a work force stymied with ten percent unemployment pushing twenty percent under-employment. We will recall the near global economic crisis that shuttered Bear Stearns and Lehman Brothers. The blood on Wall Street trickles down to pain on Main Street and choked growth from skyrocketing national debt.
Those that were fortunate enough to remain employed still lost great wealth and security. Retirement accounts imploded. Banks were stuck with toxic assets and people found themselves without a safety net making tough decisions to survive. Some left foreclosed properties and moved in with their aging parents, some became subservient to living on credit cards and ultimately defaulted. Others found employment in other states leaving behind an upside down house that would not sell to the bank. Small businesses reluctantly laid off workers and dipped into their personal savings to keep the cash flow moving. You do not need a talking head to spin numbers. Simply sit at the kitchen table with your neighbor and the pain is real.
The prosperity button was reset. The mindset moved from keeping up with the Jones’ to financial survival. Sure we can all postulate how many jobs may have been saved, the growth rate of the economy and where the blame lies. This is a time for a team effort and real leadership. Although it will not rise from the Tea Party, the sleeping giant has been wakened and an anti-incumbency din can be heard from coast to coast.
Companies are struggling to get traction, families are on a tight budget preparing for the next rainy day and reeling from the last assault to their financial security. Meanwhile the pundits continue to float trial balloons during weekend talk shows laser focused on maintaining political power. The spin machine is in full force impervious to the real pain endured by their constituents.
Once printing money continues at a rate slowed only by the ability to keep ink in the press and interest rates are zeroed out – what next? Keynesian economics has arguably prevented a near term financial calamity while failing to reverse the trend and create sustainable growth. Just as interest rates can not go below zero, we can not tax the rich 100 percent.
The next step is an aggressive broad based tax reduction policy and a bottom up review on rational services government is expected to provide the citizens. Something is inherently wrong when millionaires receive unemployment and social security.
Money is sitting on the sidelines given all the uncertainty. Smart money will go where it is least taxed. Capitalism thrives when the handcuffs are removed. The consumer must be armed with confidence and funding through a tax policy that promotes spending of disposable income rather than a narrow view that the “rich” owe more. Regardless of the ideology, it is time to put politics aside and implement a plan to rise above the economic malaise.