The useless stimulus only stimulates controversy

Last week, The Wall Street Journal had a headline ” recovery likely in 2nd half”.

Goldman Sachs has reported obscene profits for the 2nd quarter, and has declared for a major stock market rally similar in intensity to the ” Jimmy Carter is gone” rally of the early 1980’s.

Is it really that easy? Is the worst over?

Should we all get out our cut up credit cards and glue them back together, so we can ” shop till we drop”?

I don’t think so, unless you have a hidden money tree growing in your basement. If you do, don’t forget your friend Charlie.

The recession is officially 19 months long as of July 09. This represents the longest recession since the early 1930’s, which evolved into the Great Depression.

Are the Journal and Goldman right ? Has the government porkbarrell stimulus fiasco really saved the day?

Is Joe Bidenright ” we have to spend money to keep from going broke?” What ever that means!!!

No! No! and Double No!

What I have been telling you for almost 2 years now, is “we broke the machine”. This is not a simple case of throwing money at the problem to create a new bubble, The system has derailed and you can only fix  a broken system by letting it die, and creating a new and stronger one.

The fabric and structure of our society is realigning. Society’s priorities are changing, and fundamental change takes a long time.

This protracted change is what they call a Depression, and clearing a depression takes time.

Time to heal and recover, Time to use up inventory and develop new demand where it no longer exists. A basic change in the format and the foundation that society builds upon.

Debt reduction.

New industry.

New demands.

The death of old habits and a return to basics.

Something major has occurred, and stimulating it won’t work. Over stimulation is what caused it  to break.

The shakeout is just beginning, The cure is a bitter pill to swallow, and includes, bankruptcies, business liquidations, deflation, defaults, and eventually a possible hyper inflation.

Stimulating a depressed economy is having the effect of delaying the inevitable.  A new auto industry based upon reduced labor costs and new innovative designs would have been the best of free enterprise born out of a G M  chapter 11. It would have allowed for the elimination of oppressive union contracts and make American ingenuity competitive with the World once again.

Instead a government bailout will result in a micro managed mis managed auto company kept alive by government funding to save the unions.

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