What's Really Holding the U.S. Back
Politicians in Washington DC are fighting over the deficit, corporate America (with buckets of cash) isn't hiring anyone, and the economy appears to be stalled again. What in the world is going on?
The biggest problem right now is our instant gratification society. If you can remember back that far in 2009 we were in the midst of a financial meltdown and people thought the world was going to end. THAT WAS TWO YEARS AGO!
There's never been a recovery from a major recession that took only two years. And while the unemployment rate hasn't gotten better it hasn't gotten worse, which is exactly what happened in the first two years of Reagan's presidency. Then, from a peak of 9.7% in 1982 it took until 1988, SIX YEARS, to get unemployment below 6% again. Take a deep breath people, we're going to be all right.
And taxes were not only higher, they were ALOT higher back in those days. In 1980 if you make $250k+ you were paying 70% of that income in taxes. So don't give me the excuse that taxes are keeping us from growing. We're fine, we just need time.
The other thing we need to get out of our heads is that housing is somehow magically going to begin appreciating at 8% a year again. We're headed for a decade of flat housing prices, live with it, accept it, stop wishing for a miracle. That's going to be a drag but give it time. It was only four years ago that this bubble popped. How long did you expect it to take to get to some type of normal?
So politicians, investors, media members, and everyone else please chill out. This is a recovery. There are bumps in the road but it's going to take a while. If we get back under 6% unemployment rate by 2016 it would be on par with the recovery in the 80s, and this recession was much worse. It's not going to happen overnight but we'll get there. There's no such thing as instant gratification when you have the biggest economy in the world. The only certainty is that change will be slow. But we'll get there so take a chill pill, please.