Posted on 11/05/2009 4:16:52 AM PST by TigerLikesRooster
Fiscal Responsibility Has Moved Abroad 1 comment
November 05, 2009
John Browne
Last week, to the delight of its media cheerleaders, the government announced that economic growth had returned and the recession had ended. But before we start celebrating one quarter of modest growth, we should realize the only force driving this apparent recovery is an enormous increase in government spending. To finance its largesse, the government is now borrowing at a rate that has ordinary citizens and the international community extremely concerned.
Leading into the first election season under Obama's reign, this unprecedented government borrowing and spending is creating a false sense of security. The activity has allowed GDP to increase despite stagnation in corporate and consumer spending.
Small businesses – the most important creators of new jobs – are nervous. Due to uncertain economic conditions and a high degree of regulatory uncertainty, they are hoarding cash rather than investing. Indeed, their largest expenditures are often solely to replenish inventories.
(Excerpt) Read more at seekingalpha.com ...
Ping!
“Small businesses – the most important creators of new jobs – are nervous. Due to uncertain economic conditions and a high degree of regulatory uncertainty, they are hoarding cash rather than investing. Indeed, their largest expenditures are often solely to replenish inventories.”
I manage a ‘small business’ (garden center) and we are liquidating excess warehouse inventory and re-vamping what we sell based on what gets us the most for our investment.
We’re not ‘doing’ a ‘commerical Christmas;’ we are doing what we do best and no more. Not having all that outlay for Christmas cr@p, not to mention the labor costs involved in setting it all up, is going to get us off to a good start next spring. :)
I have no idea what this means. No business "hoards cash," and I can only believe that this is just the credit folks whining that sound businesses have decided to remain fiscally responsible and not borrow. No sane business, with a declining dollar, just sits on $ in a mattress or even in a bank account. If you really have cash, which used to be defined as money in excess of expected expenditures, you will invest it in a diversified portfolio, or see if you can pick up some underpriced property, or something, assuming that you actually have a hoard to so invest.
The only folks I know who have a nice hoard these days are the bailout beneficiaries.
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