Economics.

Apparently, economists have said that the recession is over. The summer of recovery worked! Oh, never mind the thousands of people that apply for unemployment everyday, never mind the increasing unemployment rates, and never mind the continued decrease of the U.S. dollar. It is all part of the mast recovery plan.

This week in the political arena the House was debating on whether or not to extend the Bush-era tax cuts to everyone or just to some. Despite the four dozen plus Democrats that were in favor of extending the tax cuts, the House decided to adjourn so they could hit the campaign trail a week early. Seems to me that the Democrats are really nervous about this upcoming election.

As of June unemployment is 9.6% nationally. Yes, it could be worse, but wouldn’t one think that since the recession is over that the unemployment rate would be down to around 6%? Just the other week, unemployment claims rose another 456,000: http://www.washingtonpost.com/wp-dyn/content/article/2010/09/23/AR2010092301481.html
I think someone should tell those 456,000 people that just filed for unemployment that the recession is over. However, an interesting article that appeared in yesterday’s Washington Post said that Americans are still least likely to work farm jobs: http://www.washingtonpost.com/wp-dyn/content/article/2010/09/27/AR2010092701753.html.

It really seems like the Democrats know that they are going to lose the House in November and possibly lose the Senate too. President Obama and Vice-President Biden continue to lambaste voters and telling them to “buck-up” : http://online.wsj.com/article/SB10001424052748704116004575521901674416306.html. They are having a tough time reconnecting with voters because the voters are totally disgusted with Congress. For instance, Speaker Nacy Pelosi’s approval ratings are as low as BP’s: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Pelosis-negatives-hit-all-time-high-as-unpopular-as-BP-103977024.html#ixzz10sylHcYh.

The point of this post is not to explain why the American people are disgusted with Congress right now and why the Democrats are going to lose in November, rather, it is about why the economy is still not recovering.

Essentially, China owns the U.S. It might be true that China needs the U.S. more than the U.S. needs China. Simply put, without the U.S. China would not be able to sell or buy as much debt or businesses. Everyday the U.S.’s debt continues to rise. Congress continues to spend billions, even trillions of money that is not there and yet they still cannot decide to extend tax cuts for all or some. The U.S dollar is struggling against every other currency: http://www.bloomberg.com/news/2010-09-29/dollar-is-near-five-month-low-versus-euro-on-fed-debt-purchase-speculation.html. However, on a good note, now would be the ideal time to buy gold. When the U.S. dollar is struggling do politicians and economists really expect the American public to have confidence in the economy? I think not.
There are rare signs that the economy is doing slightly better than it was in 2008. For instance, the stock market is supposed to have its best September since 1939: http://www.cnbc.com/id/39430155. This is still concerning. If one remembers the Great Depression of the 1930s the economy of today almost mirrors it, except on a smaller scale. During the Great Depression, the economy showed signs of recovery about 2 years in but then had another horrible collapse. I am not an economist but some economists have projected another economic collapse sometime in the near future.

To prevent further damage several things need to happen. First off, tax cuts for all need to be extended. Along with that, spending needs to be cut. After both of those things are done we would see a little positive shock to the economy. Tax cuts will create incentives not only for tax payers to spend their money but it will also give businesses incentives to create more jobs. It is a fantastic idea. When spending is cut, we could hopefully start paying off our national debt. That might be a good start. When there incentives out there for tax payers and businesses we might see a resurgence of the U.S. dollar which will create consumer confidence. A strong dollar means a strong U.S. economy.

By no means are we in a depression. However, the recession is still here and for those of us about to graduate college, we should be nervous about finding a job.