Surprising Economic Resilience
This economy had every opportunity to run and hide during the third quarter of 2005. Two devastating hurricanes of historical proportion, rising interest rates, surging energy costs, consumer confidence falling to 85, and core inflation at its highest level in years. The result? An increase in growth in the economy by 3.8%, outperforming the second quarters' 3.3% growth.
The old tongue in cheek claim that economists have accurately predicted eight of the past two recessions applies to today's resilient American spirit, and economy.
What could have caused the great momentum in the economy that allowed growth during these unprecedented calamities? Consumer spending, which is surprising in the face of the purported low consumer confidence, permitted the growth in the economy. What permitted such vast consumer spending? Lower taxes.
Many have argued that the American citizen can better manage their money than the government. When a family has more disposable income resulting from lower taxes, they have shown they will spend it on products and services that keeps this economy growing.
What if we had listened to the knee jerk reaction of the tax and spend politicians saying we must raise taxes to pay for Katrina? The anti-capitalist demagogues that want to tax oil companies profits? The point here should be well taken that lower tax rates, and less government intrusion into a free market, creates jobs, and growth. The less government, the better for the economy, and American families.
My previous Blog stating that inflation could be the straw that breaks the housing markets back was well founded in history, and regrettably without a smidgen of faith in the American spirit today. It may, and probably will come to pass that the housing market cools due to increasing interest rates resulting from inflation, however I am now reminded to mix in my calculations the resilience factor of the American spirit. Professor, what weight should we give this component of the equation? The most.
If we desire to build an economy that can withstand future blows, the President, and Congress should make tax cuts permanent immediately. Our future is very bright when contemplating a citizenry that is permitted to wield the economic power of their labors, in lieu of government politicos that nary earn a dime, however spend yours freely.
The old tongue in cheek claim that economists have accurately predicted eight of the past two recessions applies to today's resilient American spirit, and economy.
What could have caused the great momentum in the economy that allowed growth during these unprecedented calamities? Consumer spending, which is surprising in the face of the purported low consumer confidence, permitted the growth in the economy. What permitted such vast consumer spending? Lower taxes.
Many have argued that the American citizen can better manage their money than the government. When a family has more disposable income resulting from lower taxes, they have shown they will spend it on products and services that keeps this economy growing.
What if we had listened to the knee jerk reaction of the tax and spend politicians saying we must raise taxes to pay for Katrina? The anti-capitalist demagogues that want to tax oil companies profits? The point here should be well taken that lower tax rates, and less government intrusion into a free market, creates jobs, and growth. The less government, the better for the economy, and American families.
My previous Blog stating that inflation could be the straw that breaks the housing markets back was well founded in history, and regrettably without a smidgen of faith in the American spirit today. It may, and probably will come to pass that the housing market cools due to increasing interest rates resulting from inflation, however I am now reminded to mix in my calculations the resilience factor of the American spirit. Professor, what weight should we give this component of the equation? The most.
If we desire to build an economy that can withstand future blows, the President, and Congress should make tax cuts permanent immediately. Our future is very bright when contemplating a citizenry that is permitted to wield the economic power of their labors, in lieu of government politicos that nary earn a dime, however spend yours freely.
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