Dick Morris’ column “Here comes the infamous double-dip U. S. recession” sets forth a number of worrisome current statistics concerning the economy and then opines “The solution? Cut – don’t raise tax – taxes. And bring down the deficit through massive spending cuts. Reduce our borrowing needs by slashing our spending. Free up capital to feed job growth.”
WATCHDOG: That’s a ‘tried and tested approach.’ In 1935 / 1936 the Roosevelt administration endeavored to balance the budget in the midst of the early signs of recovery from the Great Depression. The result? Even worse depression in 1937!
The recent backing off of the stock market by less than ten percent may be but a natural adjustment to an unprecedented run up of over 40% over the past year and a half.
Morris sees a half empty glass when he points out that “only 43 percent of the tax benefits and entitlement spending remain to be doled out, as does 63 eprcent of the contracts, grants and loans in the stimulus package.” What this really means is that half of the Recovery Act funding will impact the economy later this year and early 2011. It should not have taken so long, but it does bode well for the future.
If Morris wants his prediction of a “double-dip U. S. recession” to be accurate, we need only follow his advice.
