Edna Rider

The biggest challenge to economic recovery is our unwillingness to write down or pay down debt accumulated over the last 25 years. Extend and pretend. This isn’t something political leaders or banking “leaders” will deal with. We’re managing this depression by borrowing from the future. But no sane person or business borrows more if they suddenly realize they may not have the revenue or the income to pay back the debt. They live on less. So borrowing will be very low for very long. In addition, we must raise taxes to pay for all these pointless giveaways. This will decrease the net income (for businesses) and take-home pay for individuals and will also put a damper on any growth. By the time Obama-the-status-quo leaves office (after 4 or 8 years) we will just be emerging from the worst of it, but our public debt will be 10x what it was under Bush. I would be surprised if we look back 3 years from now (fall 2012) and see the S&P much changed. Ironically if it is substantially higher then the majority will be much poorer (inflation will have taken hold). I am a Truman Democrat at heart but believe we have exactly the wrong guy in office: we need a benign dictator whose treasury and fed leaders are more like Volcker than Turbotax Timmy, or Helicopter Ben, both eager to tinker with the economy in ever-more exotic ways, all the while introducing ever-more risk. Things will get so bad that people will be crying out for someone like Ron Paul who just speaks his (loony) mind.