Wreckonomics; 5/27/08
The number of miles driven by Americans has dropped off precipitously in recent months. The repercussions will be dramatic. With toll revenues down, state deficits will be up, and funding for public schools and other social services will be reduced from their already tenuously low levels. Ironically, fast food sales, which initially were projected to rise due to strained family budgets, may also decrease, as you can’t patronize a drive-through if you’re not driving.
The Fed is out of ammo, having cut interest rates to dangerously low levels. The Fed also contributed to the rise in gas prices as producers don’t want inflation eating into their profit margins. The purchasing power of the monies collected by the federal government through their own gas tax will also be down, as both fewer dollars are collected, and the dollars that have been collected are each worth substantially less than they were a year ago.
This is but a small portion of the results of a failed economic policy, in which a free market economy was replaced by a neglected market economy. The type of painful but necessary recession that Paul Volcker induced in the early ’80’s may be the only thing to pull us out of this tailspin.
What I do about the above isn’t necessarily right for anyone else. That said, lately I’ve been investing my crumbs in the Brazilian economy and reading about Panamanian real estate.
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Hmmm – I guess government will have to rely on that old human frailty – gambling – to help bring in revenues. I expect to see a spate of new casinos and legislatures passing measures allowing gambling in states heretofore opposed to such tactics.
Since it seems like this entire economy under Bush’s tenure has been based on a house of cards – it seems appropriate.
K, your suggestion sounds like a good investment possibility. question: should your thought play out, as it well may, how are the Bible belt states going to reconcile their Sunday morning and their Saturday night activities? oh right, some of that ol’ time hypocrisy. LK
The Falcon has been saying this since he last sat in the confessional in hgh school and admitted “touching myself in impure places.”
WE ARE DOOMED!