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Oregon economist: Obama prediction veering off mark

June 18, 2009

By Dr. Eric Fruits, EconInternational
Portland Economist

Vice President Joe Biden says “everyone guessed wrong” on the impact of the $800 billion economic stimulus.  What he meant was that everyone in the Administration guessed wrong.  That point is made clear by the latest Recovery Report Card.  May unemployment was 1.6 percentage points higher than predicted by the Administration.  If unemployment does not improvement, we may see it surpass Christina Romer’s revised projection of 9.5 percent by the end of the year. There is an old saying that gambling is one of the few things in which you get nothing for something.  It looks like stimulus spending is another one.

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Chris June 18, 2009

Unfortunately I think the good doctor is correct, and we’re (the tax payer) is going have to pay for it.

paul June 18, 2009

The fact that anyone thought this was a good idea to begin with is a clear indication of the poor state of education in this country. Anyone who has studied history and economics would know this was a joke the whole time.

Chuck June 19, 2009

The second phase is starting to kick in.

The defaults of lots of honest hard working Americans on their homes. These are people who didn’t buy expensive homes, don’t overextend themselves, have worked all their adult lives and got their home way before the values went sky high.

These people are now getting laid off or have been laid off for a while and can’t keep up with the extended downturn. If the downturn was only 12 months they might have been able to hang on but there is no end in site for them.

Also people who have lost a lot of money in their 401k and are close to retirement are not spending. I have been a saver all my life and lost over 250k in my 401k. Thankfully I have more investments to fall back on but I am not spending a dime on anything that I don’t actually need. Just the bare minimums.

Credit card defaults are already happening and they will accelerate putting more pressure on the banks.

Then there is the efforts by the US to increase the value of bonds. This is increasing the cost of loans which are now over 6% and helping to decrease home sales and business expansion.

The icing on the cake is that in the next few years there will be a lot of baby boomers retiring early since many have lost their jobs and need some sort of income. This will take more and more from the federal budget and either taxes will have to be raised or massive spending cuts and federal employees laid off.

This will lead to more unemployment and more people losing their homes.

All of these issues will put a lot of pressure on banks that they don’t need.

Most of all it it will put pressure on the federal budget to spend money we no longer have.

We have overspent for decades and politicians just keep spending like there is no end to the money.

Most of all the electorate gets the blame since they keep electing these spending morons who have killed the US.

The US is doomed as all governments before. If you look at history no government has lasted more than a few hundred years. We will be no exception.

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