Monday, July 28, 2008

Take Your Hands Off The Lever And Slowly Back Away From The Economy

With a scant 175 days left in the Bush presidency, you would think that there wasn't much left for him to destroy. How wrong you would be!

Today, the White House has forecast a budget deficit for 2009 of $482 billion dollars. To provide some perspective, each trillion dollars is equal to 1,000 millionaires. Do the math and you'll quickly discover that we're not exactly talking chump change here. This figure does not include the 80 billion dollars that supports the war effort. If the forecast is correct, it would shatter the previous record of $413 billion, which was also set by the Bush Administration in 2004.

While, esteemed Republicans like Phil Gramm write the state of the economy to pessimism, the real data suggests something much uglier.

  • The job market is -438,000 jobs this year.

  • Gas prices while not at a record, are nevertheless well over $4.00 a gallon.

  • The Federal Reserve has identified lowering inflation as a key objective.

  • The housing foreclosure rate according to research firm, RealtyTrac, is up 121% from last year.

    And then there's Wall Street. A look into the year ahead seems pretty grim and don't be surprised when unemployment creeps up significantly, new college hires decrease, interest rates rise to combat inflation, the housing foreclosure rate increases to 150% and gas stays right where it is.

    The best advice that I can give to either presidential candidate is to get their economic team together. Not in 2009, but now. And here's a hint, you may want to put Robert Rubin, arguably our best Treasury Secretary since Alexander Hamilton, on it. There is not a minute to spare.

    As for Mr. Bush, I have just one simple thought.

    Take Your Hands Off The Lever And Slowly Back Away From The Economy.

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