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Maybe I'm out of touch (after all, I am
getting on in the years), but I seem to have an old-fashioned notion of what
a "recovery" is. To me, it's when private economic activity
acquires a self-sustaining momentum, where people are spending and
investing and businesses are growing.
To our our leaders in Washington,
however, it seems to be a time when relentless propaganda temporarily
drowns out the cacophony of a pessimistic reality; to Wall Street, it's
that transcendental moment when investors decide that easy money is forever
(and all that really matters); to corporate America, it's the point at which
orders and revenues mean far less to a business than cost-cutting and
earnings management.
And to a great many people, it seems, a
recovery is when households have become unusually dependent on the government
for income support. In "U.S. Households Getting More from Uncle
Sam than They Pay In," The Fiscal Times details the new economic
reality:
For the first time since the Great
Depression, households are receiving more income from the government than
they are paying the government in taxes. The combination of more cash from
various programs, called transfer payments, and lower taxes has been a
double-barreled boost to consumers’ buying power, while also blowing a
hole in the deficit. The 1930s offer a cautionary tale: The only other time
government income support exceeded taxes paid was from 1931 to 1936. That
trend reversed in 1936, after a recovery was underway, and the economy fell
back into a second leg of recession during 1937 and 1938.
Michael
J. Panzner
Editor, Financialarmageddon.com
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