No, I'm not a pessimist, and no I don't enjoy writing about this topic. I wish I could tell you that the problems which caused the devastation of The Great Recession that began in 2008 are all fixed and regulated. They're not!
Agora Financial wrote today in their 5 Minute Forecast the following: " As early as Jan. 21, 2010 The Atlanta Journal–Constitution was beginning to report on the seeds of the new crisis: "About 80% of stimulus money has gone directly to state governments," the paper observed. "Instead of being used to create new jobs, the bulk of the money has been used to save existing state government jobs — teachers, law enforcement and others — and for shoring up sagging state budgets."
"In a new documentary, which we've tentatively titled Risk!, we've been chronicling the challenge of entrepreneurs in the post-Panic environment to create and sustain new jobs. The policy mix that has come along with the effort to save government budgets has been anathema, in our opinion, to an environment that encourages entrepreneurship."
The folks at Agora Financial have been telling it like it is for a long time. They were warning people about the potential horrors of the real estate bubble, the abuses of the mortgage industry from 2001 through 2008, and the ensuing economic catastrophe that was highlighted in the Oscar-winning documentary titled "Inside Job" which every truth-loving American should watch and discuss.
The Agora folks spoke even more candidly today: "Unless the politics change and people begin to realize that government, even at the local level, cannot be the guarantor of American prosperity, the economy will continue to be hollowed out from the inside. Capital, in large quantities, is being misallocated to saving unproductive government assets... and crowding out investment in job-creating entrepreneurial efforts.
"Worst of all, it's not like the government is using its savings to fund its spending sprees. As you know, the U.S. government has no savings. Instead policymakers have chosen to swipe Uncle Sam's credit card and... poof, everything has been magically "paid" for.
"We can't help but sit back and wonder what the world will look like when that credit card is eventually cut off. Or when it becomes much more expensive for the federal government to borrow money.
"As we pointed out in our first film, I.O.U.S.A., the states can't print money. They have to cut spending. They have to cut services like police, firefighters and trash collection. For most Americans, those cuts won't be popular. As we've seen all across the country, people get angry the things they've been "promised" are cut.
"But unlike the states, when the federal government's credit card is cut off, it doesn't have to cut back. It can continue to spend. Continue to promise. And continue to run the printing presses day and night to pay for political whims. But for how long?"