February Was Another Dismal Economic Month: The Solution is More Self Reliance
March 7th, 2009
Another 650K jobs disappeared, over 12 million people are without employment, and the unemployment rate spiked over 8.1% up from 7.6% in January. At this rate, we could easily hit 12% unemployment within this year.
Unfortunately, Washington is not in a position fiscally or mentally to help. The federal budget deficit is at least quadrupling to $2 trillion from $500 billion in 2008. It is becoming clearer everyday that “stimulus” is politician language for pork. We already had to borrow 40% of 2008’s deficit from the Chinese, but WHO will loan us the $2 trillion? It is just basic physics (not even economics) that this grave debt level is too much weight for the world to carry. They may get through this year, but trying to continue this direction means default and chaos – just look California on state level.
The economic theory of Keynes that seems to be in style was that government spending automatically created a “multiplier effect” beyond the dollar spent. For example, $1 borrowed and spent by the government was supposed to create something $1.50 in economic activity. This might work in certain very specific areas, like reducing our energy (oil) deficit, but the multiplier is simply a pleasant myth if the money is wasted. If the government borrowed to build a wind, solar, or safe nuclear plant, which in turn allowed us to import less oil or natural gas from our “friends” like Venezuela or Iran (With friends like these, who needs enemies?), than we probably could make the case of the overall economic activity being positive for the USA.
The economy actually runs on confidence and jobs. When people feel confident, they spend and create jobs. When people have jobs, they have confidence and spend. This is a symbiotic, mutually beneficial economic relationship. However, when confidence wanes, and the government borrows like a Latin American government borrower on steroids, this does help economically or cause a net increase in employment.
However, we can drastically increase real employment without having to borrow a penny. All we need to do is focus more on self reliance, meaning shift part of consumption away from cheap imported goods to safe American-made products. It really is that simple.
The day this problem really starts to get solved is the day roll up our sleeves and start to fix it. Whining and bailouts are not going to make America great again, but we can and will once WE seize the day.
Please join me.
Sincerely,
Todd Lipscomb
Founder of MadeinUSAForver.com, your source for products made in America.
Saturday, March 7th, 2009 at 1:49 amand is filed under Uncategorized.
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