Monday, July 16, 2012

It's the Austerity, stupid

Retail sales are down for the third straight month.... Panic, panic, gnash your teeth and rend your garments, or not. There was a second quarter slow down after two quarters of robust growth in retail sales. Sluggish sales were driven by high gas prices and fear of even higher gas prices to come. To put the icing on that cake, the biggest decline in June was gas station sales. Ironic that the corporate spin on the "terrible" economy is based on gas prices declining after it was high gas prices that did a big chunk of the damage.

The Red States laying off 1.1 million teachers, social workers, cops, fire fighters and bridge inspectors is also doing a lot to depress the economy. That sort of damage takes awhile to work through an economy, and some of it is offset by other factors. The Blue States taking Stimulus money to build projects for example. If the Republicans had been more successful in 2010 in capturing states and imposing Austerity-ism then the decline would have come sooner, larger and would be even more difficult to recover from.

The current decline in gas prices will have a positive effect, but doesn't provide any actual stimulus to the economy. The only real solution would be to run tariffs back up to where they should be. All the tariff rates are still on the books, they've just been cranked down to next to nothing. Since we are dependent on imports, the revenue it would produce would likely eliminate most of the deficit while our manufacturing base was rebuilt. The augment that this would create a trade war is absurd on the face of it. What exactly are they going to do? Stop buying from us? Ha, ha, ha.... (stop buying what?) or stop selling to us? Great! All the better.

Mittens says that he will confront China on his first day in office. Yeah, he'll confront them like a used car salesman and try to sell them the Washington Monument.

2 comments:

Anonymous said...

The best way to improve the economy is to stop the wars and tax corporations like people.

......don't hold yer breath...

Mobis21 said...

The disciples of austerity on the Right understand that their strategy has absolutely NOTHING to do with sustaining economic growth.

Except for the national ignorance of the American public, a good majority of the rest of the world's population already understand this.