Thursday, November 4, 2010

Good News: Gridlock. Bad News: Gridlock

From CNN Money.

"Several financial experts said it's highly likely that federal spending geared toward getting the job market and housing market (the two biggest laggards in the economy) back on track will be a lot lower than the past two years.

That may mean the economy remains stagnant throughout next year because of a lack of stimulus and a focus on deficit cutting.

"Now is the time to face the music. There may be little growth without government intervention," said John Lekas, principal with Leader Capital Corp., an investment firm in Portland, Ore.

That doesn't sound very delightful. But one could argue that the midterm results are a sign that more Americans are willing to suffer through another tough year or two if it means that government gets smaller and the federal debt load and budget deficit come down."


"Lekas took it a step further. He thinks the best medicine for the economy is for the government to completely butt out and let the private sector sort out the mess.

"Free markets are absolutely necessary and healthy," he said. "It's not good for the economy in the short-term but we need to get through the foreclosures and find a bottom in the housing market before the economy and job market can truly improve."

Well--two more years of this crap and worse. Got enough supplies? Too late to get them now. Now we frugalites sit back and let the spendthrifts go crazy like last-minute grasshoppers scurrying around trying to get something together for this winter (both seasonal and economic). The buying time has come to an end and will return in about another 10-30 years.

Unless Obama gets re-elected in 2012, look for growth to start building from then on--time to start investing in earnest to make up for the losses from previous years, and to prepare for the next 20-30 years and/or retirement. Save, save, save while the saving is good and the buying will be bad. Let the grasshoppers spend!


Post a Comment