TOO MANY HOUSES AND CARS

Another stimulus or tax refund for buying a new house or Cash for Clunker program? Will these programs help our ailing economy as President Obama and his fellow travelers in the House and Senate claim? Should we listen to Paul Krugman and the like? Emphatically No, and here is why:

Because the Keynesian thinking policy makers of the past four decades, we have built too many houses, cars, boats, RVs and vacation homes. Far more than the producers in the economy can afford. These money sink holes were purchased through borrowed money that cannot be paid back without more borrowed money or extreme sacrifice.

Like a green house grown plant whose blossoms were forced, we have forced the growth in the supply of goods and services in our economic system. Good times? You bet. Can they be sustained? Not without more debt creation or savings which we seem loathe to do.

America's two economic engines are cars and houses and we have produced more of these than we can use or afford. Because of this already over stimulated supply through excess liquidity we now face some very hard times. Stimulus programs of whatever nature only produce more of the things we are choking on. Stop already!

What about military spending, health care, social relief programs and the financial industries? Aren't these growth producers? Only to the extent we can afford these things without deficits and borrowings do they remain economically neutral. Each of these sectors in their respective ways have helped us to this recession/depression condition.

Let's get back to what made America strong: producing and saving; not borrowing and spending. Allow the market to disgorge and remove this over supply-- don't make it worse by stimulating an already over supply.

With Love and Kindness,

THE HATMAN

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