Posted on 03/04/2009 9:41:28 AM PST by nosofar
Democrats are taking a gamble. It's still almost two years until the next election. This is plenty of time to come out of recession. I remain optimistic that this will be the case. By the obscene spending now, Democrats achieve a few things. They reward consituencies, increase dependency on government, and consolidate their own political power, all while blaming everything on Bush and Republicans. If they had waited for a few months to do this, they would be taking more of the blame. They'll get away with it, too. Conservatives are helping out by lowering expectations with every hysterical cry that we are heading into a depression or worse. This may or may not be true. If it isn't, all that is accomplished is that the bar will be set lower. If we *don't* go into a depression, Democrats will claim that as success and be vindicated that the massive spending spree is what brought us out (not in spite of it). By the time the next elections roll around, we will probably be out of the recession. People will have forgiven or forgotten the spending binge. The majority of the populace are rather ignorant economically and enough will accept the idea that spending like a drunken sailor is a good thing that this will be come public policy for the future. In 2010, Obama will be re-elected and Democrats will retain control of both houses and Pseudo-Keynesian 'economics' (lipstick included) will become the policy for the next decade.
The fundamentals strongly argue that things will be much worse in 2010—precisely because of the horribly wrong policy actions the collectivists have decided to take.
Technically, the downmove since the fall of 2007 is clearly an impulsive move. It is also quite clearly the first downmove, and so must be followed by a corrective rally of some sort. But then there must be at least one more impulsive downmove, to new lows. There is no more reliable pattern in technical analysis. And the structure of the price charts could not be clearer. You can take this forecast to the bank. I'll even tell you that the bottom of the first downmove is only weeks away-perhaps even only days away. The spring Equininox is a highly likely target date for the bottom. Just be aware that the rally that follows won't reach new highs, and won't last more than a year or so (and most probably somewhat less.)
Μολὼν λάβε
Correction...
“It’s 21 months until the next election...”
Say what?
In politics (I’ve worked on a number of campaigns so I’m not talking just to hear my head roar), an incumbent always has an edge or a step ahead of a challenger. The challenger must work doubly hard to overcome that edge.
I realize that, but a “sitting” congressperson and an incumbent are the same thing - at least that’s my interpretation. I think you meant incumbent vs. challenger?
Sorry. My brain outpacing my typing skills again. :)
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