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Preventing U.S. recession: Bush is wrong

Posted January 31, 2008

"Bernanke, Bush, and all the politicians on Capitol Hill are crowding each other at the microphone in their eagerness to tell us they can resolve the situation by simply passing out money." — John Pugsley

by John Pugsley, The Sovereign Society

Baltimore – (TFN):  In President Bush’s State of the Union speech, on Monday night, the President told the nation: “To build a prosperous future, we must trust people with their own money and empower them to grow our economy.”

Too bad President Bush and the rest of the people in Washington, including the Fed, won’t follow this advice. It’s certainly the only solution to the impending economic disaster.

U.S. Recession: Housing crash

The year-long hiss of the deflating real-estate boom, accelerated by the collapse of the sub-prime mortgage market, hit the world’s bourses with a vengeance a week ago Monday. When world stock markets plunged, the Federal Reserve’s leaders were confronted with their worst nightmare.

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The Fed’s Open Market Committee (FOMC) knew in advance that devastating housing numbers were about to be released. On Thursday, the government reported that sales of existing homes fell again in December. December’s official numbers capped off the worst year for sales of single-family in nearly 25 years.

These numbers also marked the first annual price decline on records since 1968. Robert Shiller, a professor at Yale University, said: “We are embarking on what might be the biggest decline since the Great Depression.” He estimated that more than US$1 trillion of housing wealth has been erased so far, with more to come.

U.S. Recession: A desperate Fed move

It’s no surprise, then, that with stock prices collapsing and more bad news about to hit, the FOMC made a desperate “finger in the dike” move. The Fed cut the Federal Funds rate on by a whopping three-quarters point before the market opened Tuesday morning.

More bad news tipping the economic teeter-totter toward “recession” could have caused a panic the Fed might not have contained. So the Bernanke Fed repeated what Alan Greenspan faced and how he acted in October 1987.

Bernanke, Bush, and all the politicians on Capitol Hill are crowding each other at the microphone in their eagerness to tell us they can resolve the situation by simply passing out money. Weeks ago, President Bush promised about US$145 billion in tax relief to give the sagging economy a “shot in the arm.” Read on to learn how Bush is planning to reinvigorate the U.S. economy and why his plan won't work.

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