The Real Crash is coming: Obama can't fix the economy.

[_bcspace]

Not with his policies at least.

It's political suicide to let interest rates rise, but Obama put us in this position in the first place by spending $6 trillion and calling it economic growth when we will have to pay it back somehow. Sure, other presidents also suppressed interest rates, but only Obama followed it up with unrestrained spending that had no return. Also, with interest rates at zero, there is little incentive to save or make capital investments. I like the comparison with the Soviet Union setting the price of bread. Not letting the market set interest rates is like a price control meaning increased demand (for money), less supply and quality (the dollar has less value). Increasingly, others no longer want to buy our debt.

Obamacare exacerbates the situation as employers now know that it's business suicide to keep too many employees and will continue to trim the work force. The dollar has little value. The price of employment in the U.S. is too high.

Blaming Bush was never a sustainable argument. However, since the solution to the economic crisis is to raise interest rates and reduce debt, the process of which will send us into a Depression first, the stage is set for America to blame Obama and the Democrats for decades to come.

Rich Dad knows it. The 10% know it. But the 90% have been trained to follow the government's lead in unsustainable living and therefore can't recognize or change with the changing sources of wealth in the economy. There will be no recovery without a sharp change in direction and that means Obama and the Democrats have to go. Everyone recognizes it. even the dimwits at Newsweek have recognized it.

[_Drifting]

I think the biggest problem Obama faces is the size of the mess Bush left him with.

[_ludwigm]

I think the biggest problem Obama faces is the size of the mess Bush left him with.

... and too many bcspaces are lolling around...

[_Analytics]

Not with his policies at least.

It's political suicide to let interest rates rise, but Obama put us in this position in the first place by spending $6 trillion and calling it economic growth when we will have to pay it back somehow. Sure, other presidents also suppressed interest rates, but only Obama followed it up with unrestrained spending that had no return. Also, with interest rates at zero, there is little incentive to save or make capital investments. I like the comparison with the Soviet Union setting the price of bread. Not letting the market set interest rates is like a price control...

Two points. First, you are contradicting yourself in the statement I highlighted. You are correct that in theory, lower interest rates reduce incentives to save but, you had the rest of the statement exactly backwards: the truth is low interest rates increase incentives for capital investments. Just as an individual will buy a bigger, more expensive house if interest rates are low, low interest rates let businesses borrow more for capital investments (e.g. factories, nuclear power plants), and let the government borrow more cheaply so they can build more and bigger roads, schools, power grids, etc.

Second, the Fed only has control over short-term interest rates. Long-term interest rates are in fact being set by the market--rates are low because America now has lots of "Rich Dads" saving money and fewer poor-dad types who are both willing to borrow and are also credit-worthy. Since there is a huge supply of money from the savers and a weak demand from the borrowers, the market has driven down rates.

[_MeDotOrg]

Also, with interest rates at zero, there is little incentive to save or make capital investments.

As Analytics said, the best time to make capital investments is when interest rates are low.

Obamacare exacerbates the situation as employers now know that it's business suicide to keep too many employees and will continue to trim the work force.

I don't know when it is a wise business decision to keep too many employees, with or without the Affordable Health Care Act. Besides, I thought we were going to pay 14 cents more on a large pizza. As we all know, people will now start flocking to Pizza Parlors that employ less than 50 people, so they can save that 14 cents.

Blaming Bush was never a sustainable argument. However, since the solution to the economic crisis is to raise interest rates and reduce debt, the process of which will send us into a Depression first, the stage is set for America to blame Obama and the Democrats for decades to come.

Bush is not personally to blame for the crash of 2008 anymore than Hoover was for the crash of 1929. You're not really looking at the problem if you believe all crashes (and recoveries) are simply the product of who is in the White House. Policies and lack of regulation and regulation enforcement are to blame, and many of those policies were enthusiastically supported by Bush and McCain. If you want to understand what happened, stop looking at people and start looking at policies. What is disturbing to me is that Obama has done very little to remedy the situation, and Romney wants to undo the little that Obama has done.

Rich Dad knows it. The 10% know it. But the 90% have been trained to follow the government's lead in unsustainable living and therefore can't recognize or change with the changing sources of wealth in the economy. There will be no recovery without a sharp change in direction and that means Obama and the Democrats have to go. Everyone recognizes it. even the dimwits at Newsweek have recognized it.

I honestly don't understand what you are trying to say here. Specifically, what are the "changing sources of wealth in the economy" that we are not recognizing? What is the 'sharp change'? What specific policies will lead to the recovery?

[_Brackite]

I think the biggest problem Obama faces is the size of the mess Bush left him with.

Why didn't the stimulus that was signed into law about 42 months ago help clean up the "mess" that Bush left him with?

[_moksha]

With the real crash coming, is Bc setting up a defense for President Romney?