Worse than anyone believed

Remember all that dithering about "is-there-is-or-is-there-ain't" a recession last year around election time? Until the bank crisis in late October, the general consensus was that "there ain't." Well, a new report from Department of Commerce tells us that while gasbags were dithering, the US economy shrank at an astounding annualized rate of 6.2% in the last part of 2008, a rate not seen since the depression of 1982. How exactly did the all those alleged experts fail to notice such an enormous decline while it was happening all around them?

Worse, there is not the slightest reason to suppose that this decline will not continue indefinitely into the future. We're in a vicious circle: people sharply reduce their consumption for fear of losing their jobs, businesses go bankrupt causing people to lose their jobs, people reduce their consumption even more, more businesses tank, etc. Where does this process stop? Why will it stop? And even if we do hit bottom sometime in the near future, why would a "recovery" occur? What are we supposed to recover with?

Mr. Obama thinks that a borrow-and-spend spree will fix our problems, but what were we living through these last eight years if not the biggest borrow-and-spend spree in human history, and look where that's got us! Mr. Obama just can't grasp the real problem: a country that has replaced its once-great industrial base with the pursuit of wealth by accumulating debt-based financial instruments has discovered the hard way that, first, borrowing-and-spending as a way of life is a dead end and, second, that we have no way of stopping the debt-based financial pyramid schemes from collapsing and taking the country down with them. Mr. Obama doesn't know how to create new wealth; he only knows how to consume existing wealth and how to spread it around to his cronies and cohorts. His policies are exactly the opposite of what we need. That's why we'll see lots more shrinkage in the US economy.

Read it here