Page 6
Could President Bush's tax cut save the economy
and keep the stock market from getting slammed again?
FIRST: It's back-loaded -- timed for the majority of the cuts to kick in five years, seven years, up to 10 years down the road. Only a tiny percentage of the $1.7 trillion tax relief they promised will go into the economy in the next 12-18 months.
SECOND: This crash has taken nearly $6 trillion out of investor's pockets. Even if the entire $1.7 trillion could be handed back to taxpayers THIS YEAR, it would only be a tiny, pathetic drop in the ocean compared to what investors have lost in stocks - nowhere near enough to invigorate the economy.
THIRD: Even though the tax cut is pitifully inadequate to stimulate the economy, Democrats and even some moderate Republicans are doing everything in their power to whittle it down still further. They know it won't do anything to revive the economy NOW ... and they also fear that declining tax revenues combined with tax rate cuts will doom the government to $100 billion deficits ... crashing bond prices ... and rising interest rates for the foreseeable future.
Even Greenspan's interest rate cuts are too little, too late.
This crash destroyed at least HALF of all of the American people's life savings. It scrambled the retirement nest eggs of more than 45.69 million baby boomers who will be retiring in the next five years.Most important, it is reversing the great "wealth effect" that drove this economy for the past eight years, instantly transforming millions of big spenders into stingy Scrooges.
Don't think for a minute that interest rate cuts could possibly undo that kind of damage. Consumers are neither willing nor able to begin spending like they did in the stock market's heyday -- no matter how low interest rates go!
Look. The Fed lowered interest rates eight times before and during the Great Depression. Did that stop the Depression? Of course not!
Before and during the recession of 1973-75, the Fed lowered interest rates six times. That didn't stop the economy from plunging either.
Ditto in 1945, 1953, 1970, and 1990.
Fact is, there's nothing anyone can do to keep this staggering stock market debacle from smashing the US economy- NOT President Bush, NOT Alan Greenspan, and NOT even the entire US Congress.
And there are more crises to come!
The Great Debt Debacle and the Wall Street crash are only the first of several major crises that will bludgeon the US economy in 2001. More are on the way ...- A crash in long-term bonds is inevitable ...
- The energy crisis will cripple the US economy ...
- The value of your home will drop at least 25% in the coming real estate crash ...
Today's fledgling economic slowdown, skyrocketing debt, soaring oil, gasoline, natural gas and electricity prices ... sporadic and even chronic shortages ... and crashing government bond prices will be huge hurdles for the US economy to overcome in the next 18-24 months.
