Listening to economists wax poetic is not exactly akin to Chris Rock talking about eating disorders in Rwanda. Get ten economists and get ten different theories about why something will, or will not occur. Trying to teach basic economics is best left to the academics, but there is a lesson that all of us can take from recent developments. As the United States attempts to have a sustainable recovery from the great recession, we are still plagued by excessively high unemployment and a tax and spend policy of the current administration. One bright spot of the first few months of 2010 has been higher than expected real estate sales, at least until the real estate credits for first time home buyers expired on April 30, 2010. Sales were up an extreme multiple, and real estate sales, funded properly I might add, have an incredible economic trickle down effect on the balance of the economy. Appraisers have jobs, contractors do home improvements, and the big box and neighborhood hardware stores are the beneficiaries of supplies being purchased, and services being rendered. Whatever revenue the country lost in offering these tax credits was made up times over in all of the residual economic activity. What has happened since the credits expired? Home sales have dropped precipitously. Inventory has remained stagnant and the effect of the credit has come to a grinding halt. How does this relate to unemployment? How about offering the same kind of investment tax credit to companies to hire workers and employees to expand businesses. We are a nation of entrepreneurs willing to take risks and grow our businesses. At the present time, the Obama administration thinks it is a better strategy to tax and spend our way out the great recession. Someone should clue the President into the facts surrounding housing sales and have him bring the same type of thinking to business and jobs. If the great entrepreneurs of this country feel as if the government is working with rather than opposing and standing in the way of growth, maybe, just maybe unemployment will recede to normal levels and we will see a sustainable recovery based upon proper free market principles. The facts speak for themselves.
Opinions expressed are those of Jim Silver and are not necessarily endorsed by NPC.