Townhall.com columnist Dan Kennedy posted an article entitled, "The Flight Of The Money: Where Has It Gone?"
Mr. Kennedy points out that two months ago General Motors was held up as an example of successful government intervention. During the week of July 4th, General Motors announced that it needed to borrow $ 5 billion dollars to repay its debt. It really wasn't a good example, but that didn't stop the spin.
The article asks, "Where is the economic growth caused by the stimulus?" He points out some of the indications that it is not there.
- Flight of Capital. Major corporations are moving hundreds of millions of dollars into overseas investments.
- Capital not being put to work. There is an estimated $2 trillion of excess cash reserves currently held by companies other than financial institutions. With the rapid changes in regulations, the spectre of increased taxes and healthcare costs, there is a fear of expansion or new hiring. No one is sure what tomorrow's rules will be.
- Companies are moving overseas because they fear they will not be able to operate profitably with the new taxes and regulations headed their way in this country.
According to the article:
"Beginning in 2011, he (President Obama) has a dizzying array of redistribution and destruction of wealth tax schemes ready for unleashing, like crazed beasts through the Gates of Hell, to eat whatever enterprise remains.
"The economy is starved for private sector money in motion. Deprived of lifeblood. Gasping for oxygen that isn't there. If you but listen, you can hear the death rattle. Even the business and financial news media pretty much fails at stitching these things together, to reveal the full picture. The few highly credible experts who speak eloquently about it, like my friend, the economist Harry Dent Jr., are mysteriously shunned by the media. There seems more willingness to point to the façade than to walk people around to the vacant lot behind it, and edge of cliff it teeters on so precariously."
Unless the composition of Congress changes in the November election, we will not see this country recover from the Obama economic policies. The hope in a new Congress is that they will be able to repeal some of the policies that have been the worst offenders in slowing down the economy. I would like to see both healthcare reform and the financial reform act repealed and replaced with legislation less than one hundred pages long that actually does what it claims to do. In healthcare it would mean less government control, in the financial reform bill, it would mean actually reforming Fannie Mae and Freddie Mac, who were at the center of the mortgage market collapse. I am not sure Congress will totally change hands, but it needs to.
Leave a comment