It is only certain that uncertainty rules . . .
It really doesn't make a whole lot of difference if we are in the first part of a double dip recession or close to the bottom of a single dip; the US economic recovery will be very, VERY slow compared to what the country has been used to after past recessions.
The recovery won't really get under way until the real estate market gets back on track. Today, the estimate is that we have more than a year’s supply of homes on the market. That is, a year's supply of what used to be a year's supply in the good (read, "of course the beanstalk grows to the moon, stupid") old days. In today's market it is two or three times that amount. Then there is the shadow inventory (those are the houses that the banks will wind up owning when this all shakes out, and which they will then dump on the market.) that will be, at least, another 12 months added. So you see, in real terms it may be 4, 5, 6 or even seven years before things get back to some semblance of "normal" in the residential real estate market. Oh yes, we are just now beginning to feel the slump in the commercial real estate market. That bit of bad news has yet to be figured into the sound bites of the Political Wonks.
The American Consumer is not as stupid as most political and financial pundits are. Those of us who live in the real world, that is East of Riverside, CA, and west of the Hudson River, excluding that part of the heartland which lies inside "Beltway"; have a much better understanding where the economy is, and where it is going than those inside the Beltway, on Wall Street, or the nuts of the West.
Consumers have become Savers and are saving all they can, at least those who have a job are. Job or no job, there are few who are spending on anything which isn't necessary, so retail sales aren't going to pull us out of the doldrums. Small businesses, the major creators of jobs, aren't going to do anything that uses cash because they don't know what "money grabbing/money costing" Sisyphean Load Washington will pile on their backs next.
Maybe the Tea Partiers and their associated groups will get Washington's attention and stop the ridiculous taxing and spending spree before it is too late. The only certainties are these:
- Unless things turn around, the U.S. will be relegated to Third World Status by the time my Grandson graduates from collage and has to go to India or China to find a job.
- Until entrepreneurs are free to carry on business without fear of retribution from Washington, we will continue with 10% plus unemployment.
- Without reducing the exponentially increasing size and cost of government, that’s all governments, Federal, State and Local, to somewhere under 5 % of GDP, we will continue to be a debtor nation.
My Take
Dave Skibowski
Dave;
ReplyDeleteGreat Blog!
That's a lot of wishful thinking in your post. And I'm responding to it a few months late.
With recent talk of new legislation limiting Federal government spending to 22% of GDP as a mitigation tool which actually allows for increasing borrowing by another 1.5 Trillion dollars (excludes all actions by the Fed Reserve)our politicos truly don't get it.
I think the Tea Party still in its infancy will have little effect on changing much in Washington this time around. If it proves it has the stamina to last another 6-8 election cycles then that will change.