The reports of the last economic quarter are now in. Evidence exists that we have experienced a recovery for the first time in four quarters. Anyone in their right mind ought to celebrate this fact. I suppose most Americans do take some comfort in this report, unless of course they so despise this president that they want to see an economic collapse on his watch. I find such people uninteresting and terribly angry, qualities that repel me personally. While I do not agree with a good number of the president's economic policies I pray for him, and us, that he succeeds. The country has always found a way to move back to the center regardless of who the president is at the time. I expect this will happen again over the course of time but the radicals on both sides need to be ignored on the whole.
The new reports says that the economy rose by 3.5% in the third quarter. That is the good news. But the bad news is that government aid from tax credits for homes, and rebates for auto purchases, are both temporary. Economists generally believe that consumer spending will decline without this federal help. Will buyers back off in the face of rising joblessness and very tight credit?
Look, this recovery is extremely fragile no matter how you view what prompted it. The White House spins it positively, as they should, but there is very little room here for huge cheers. Most Americans, and I am one of them, have yet to feel any real benefit from a recovery at all. I have a job, for which I thank God, but I am making far less than I was 18 months ago and far less, in real dollars, than I was five years ago. It seems that job losses are declining but they are still very real. This is no time for economic giddiness to say the least. The value of our homes remains much lower than before the summer of 2008 but then many of us had hugely over-priced homes during the years just before the recession hit. Anyone who used their home to try to make a profit was using it unwisely in the long run. The last I checked you bought a home to live in it.
The president struck a responsible chord when he said that this report was "welcome news" but added, "We have a long way to go to fully restore our economy.
By the way, the four straight quarters of contracting economic activity is a record streak. Is this the gentle calm before another storm or is a real recovery, albeit a small one? We simply do not know yet. Gloom and doom folks assure us the worst is yet to come. Few are truly optimistic. My greater concern is the way we are spending federal money to try to get out of the recession. Who pays the bills? And now that we are on the verge of a health care bill being passed that reaches nearly 2,000 pages what next? While I welcome health care reform I do not welcome massive speculative spending by the government on a program that is almost sure to make things worse in the end. By the way, I do not work for the insurance companies, own no stock in them and have no rich friends who run them. I have had my own battles with health insurance companies like most Americans. I do not like our present system. This is very likely the one thing massive numbers of us do agree on.
I read the various non-political takes on the health care bill this morning. Here is my amateur take on it all. We don’t know what we are getting in this legislation. Democrats clearly want to get government into health coverage in a huge way. Republicans clearly do not. The Republicans did nothing to fix the problems for six years (2001-2007). The present House bill cuts Medicare over the ten years following 2013. Personally this hits me in the gut but I am frankly willing to be hit if I feel it is truly good for everyone else. This is not about what is best for me personally. I think this is the bigger issue for most of us. It seems the majority of Americans want to know "what’s in it for me?" I honestly do not start with that question though I do ask it when a national debate like this rages.
I said to my wife this morning, after my reading the various non-partisan reports, “It seems this House bill will make things worse for us.” We worked hard to get out of a huge monthly payment for health insurance last year and then set up a Health Savings Account (HSA) in the process. I must tell you the HSA is the best kept secret in the whole debate. It has helped us reduce payments almost by half and in the end we came out with better health coverage. Yet I hear almost nothing about this program in the debate. Is this because it is not what the Democrats created? It sure seems that way to me. So few people use this provision who could and this amazes me personally.
So what do we get with "almost" universal health care? (The Democratic leaders say 96% will be insured!) Medicare cuts do seem obvious. This is why the elderly fear the program. But there seemingly is much that is worse in the details. Who pays and how? Worse yet, who administers and at what cost? And how efficient will the administration be if the federal government is involved? Anyone ever dealt with the post office or social security in any significant way? We have some answers to these questions but again few talk about them. Several states have passed health care bills. The truth is they are still trying to work out the "bugs.” There are positives and negatives. Incrementalism is always to be preferred but Democrats tend to want everything at once, especially while they have the power to do it at their fingertips.
Perhaps it is my lingering fear about federal programs I have known for 60 years but I simply believe the best government is that which is the most local. This is true precisely because it is a government that answers the most directly to the people being governed. As a simple principle, rooted in my Christian worldview, I believe the government that governs the least (from the top down) is the best government. I think history also supports this conclusion. This does not mean the federal government does not respond to crisis and national emergency.
The idea that somehow I am among those tight-fisted conservatives who do not want to help the poor and the weak among us is a myth I ardently reject. My problem here is simple: Is this involvement of the federal government the very best way to help the poor? I am very unconvinced that it is by what I read and understand. And there is a long history of evidence to support my concern.
Either way please do not tell me I do not care about the plight of the poor. What the
poor need, more than anythi
ng else, is a good job, better education and the opportunity to truly advance if they desire it and are willing to work hard and be smart in their actions. They also need the church to become more involved in teaching, helping and serving them. The great gains of the Reagan-Bush-Clinton era may be thrown away in the near future. (Note: I do not include George W. Bush in this point since I do not think he handled the economy well on several fronts.) I have grandchildren. I look at these two precious girls and wonder if they will have the same opportunities that I had. This troubles me.
But make no mistake about it. At the end of the day I am not worried for my granddaughters at all because their parents are giving them what no prosperity in America could ever provide: a Christian worldview that understands how to live for the glory of God in any time and under any government. I ask: Is the church really preparing people to live, in plenty or in want, for the times ahead? I would have to say no from all that I can see. This, for me, is the far greater issue before us now and long after President Obama is out of office.
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John – Excellent post. I believe that the federal government plugged the holes in the economic dike with the only things they had available to them, debt based bailouts, credits and incentives. They might as well have plugged the holes in the dike with time bombs. The “fix”, when it ticks down to its inevitable end, will likely make matters significantly worse. Blessings and Peace. KB
Thank you for sponsoring the Biblical Forum. It was a lovely weekend.
About the Q3 growth, you wrote, “Anyone in their right mind ought to celebrate this fact.” I think I am in my right mind, but I am not celebrating the third quarter growth. And it has nothing to do with my opinion of President Obama. The reason is: This growth is simply increased federal spending. Federal spending is a part of the GDP, and it is way up. We have merely moved a portion of our future consumption up to the present day, and then we sent the invoice to our children and grandchildren. That’s not cause for celebration.
But I think there is some good spiritual news buried in there. It seems that Americans are significantly shifting their behavior. They are spending less, paying off debt and saving more. This will cause economic hardship in the short term as jobs driven by conspicuous consumption are lost. But if the federal government doesn’t meddle in the economy too much to try to preserve the status quo (and that’s a big if) then, over time, we will see a gradual reorientation to a healthier state focused less on consumption and more on production and investment.
I had a great economics professor at Judson who taught me well, even though we did not understand probably half of what he was trying to get across to us at the time.
After graduation, I spent a lot of time with him. He told me that, when the United States faced some of its greatest economic trials yet, his students would remember their lessons. And in my case at least, he was right. What is amazing, he predicted the latest economic crisist that we are in, and tried to teach us what he thought were the solutions to get out of it.
Three years ago, I started remembering his lessons…and predicted to my friends and others….step by step what would happen next. I also started studying the Great Depression at length.
First of all, we were due for this severe recession, because of a huge National Debt, as well as greed at all levels. (I knew a man that “gave back” five properties in this past real estate down turn. Also, I knew real estate brokers that made millions selling properties to poor people that should have never qualified to begin with.)
I spent the majority of my life in Illinois, and am glad to see a fellow from Illinois in the White House! Hurrah! But, I am amazed at the amount of money being spent to “shorten” the recession. Folks, it took us from 1952 to last December to get to just under 11 trillion in National Debt…and we wanted to add 3.6 trillion this year…and probably the same amount next year? Ron Richards (the economics professor) literally wrote the latest National Debt figures on the board every day for the two years that I had classes with him. He was constantly preaching to us that this was not the answer to fixing our problems, in the same way that piling on more personal debt will fix our personal issues.
Keep in mind as well, Obama walked into an almost impossible situation that is the result of many past adminstrations. Christians shouldn’t even be involved in the finger pointing…but should be suggesting solutions.
Unemployment will continue to climb, and is grossly understated. There are many people that do not show up in the numbers…full timers relegated to part time work, people that exhausted their benefits, retirees who had to go back to work, and commissioned sales persons. The true number is between 15% – 20%. Companies are supposed to start hiring again, in 2013 – 2014. (In the meantime, since many jobs lost will never come back again, consider getting into a home based business. It will allow more time with the family…not less, which was the past corporate trend, and a certain amount of freedom. Yes, any work means long hours, but they are your hours to choose.)
Based on some of the major indicators that I have seen, hiring being one, large purchases being another, my prediction for the true end of the “Great Recession” is either in 2013 or 2014 — that is, if there are no other major bombshells in the mean time (I predict that there will be, by the way.)
As Christians, we need to be concerned with alleviating the suffering out there. In my generation, I have not seen more! Every day, people are losing their jobs, savings, homes, cars, marriages….and hope! I founded a company…Phoenix Diversified, Inc., and a website..www.freeflowturboweb.com, to try to do my part. The entire country needs to be working together to get out of this one….and Christians need to be taking the lead, as servants!