I think 2012 is a bit optimistic. The stock market did its “dead cat bounce” after the passage of the pork package (aka stimulus bill) and investors are now its starting to realize how little of the deficit spending it actually going towards “shovel ready” infrastructure projects and how much will be expansive government social spending that will accumulate debt and interest in the years to come.
Several Obama supporters tried to pull as much “positive” news from the spring’s normal increase in economic activity to proclaim “the worst is over” but real measurable results are still in decline. Plan on 12% unemployment by Christmas.
You might be right about 12% unemployment. I couldn’t say. I will say that the small businessmen I know are not hiring and are not investing, largely because they don’t know (but fear) what all this administration has in mind for the economy and for them. I really do think that right now we’re in a “Democrat recession”. Until all the Pelosi/Obama shoes drop, I don’t think anybody is going to be in a mood to invest, whether on Wall Street or on Main Street.
I see where, in my state, power companies have supported a bill allowing them to raise rates in order to meet “global warming” mandates by putting money into whatever this government decides is truly “green energy”. I guess they’re hedging against fines to be imposed by burning fossil fuels and are going to generate their own “carbon offsets” with consumer and government money. Knowing that, they’re getting ready.
So, if one has a business that uses a lot of energy, what would one do? Expand production based on today’s costs, or wait and see what it’s all going to cost down the road. Add to that the fact that businesses don’t know what the healthcare bill is going to cost them, and the further fact that they are likely to be facing higher interest costs in the future and higher taxes, but don’t know what they are going to be. Further, if your business is non-union, how do you know you won’t be unionized the minute this government does away with secret balloting in union elections.
What they do know is that the government is going to impose those things, and that foreign firms will not have to deal with similar mandates. Who would be optimistic in a situation like that?
And who would hire? The government seems likely to impose a requirement that businesses incur additional COBRA costs beyond what is already required of them under FMLA. So, maybe you were too optimistic and hired more people thinking the economy would turn around, but find that your energy costs and taxes are worse than you anticipated. So, you might have to lay people off. But if you do, maybe it will still cost you a lot in benefits to laid off workers. Your present answer is simple. You don’t hire new people, and you don’t replace those who leave. Perhaps you lay some off now while you can still do it.
