Obama's Economic Plan Will Make Things Worse

According to Forbes.com:

"I don't think we will live the same way for 10 years," says Howard Davidowitz, chairman of New York-based retail consultant and investment bank Davidowitz & Associates. "People are so scared they're starting to save."

Retailers at risk in 2009, he thinks, include outerwear specialist Eddie Bauer and teen-apparel-seller Pacific Sunwear, along with Zales, the big jewelry chain. All three shuttered at least 8% of their U.S. stores last year, with many more closings expected. The same is largely true of Charming Shoppes, the owner of Lane Bryant, which closed 150 stores last year. With a mountain of debt and losses totaling over $260 million over the most recent 12-month reporting period, the company will close another 100 locations this year…

Davidowitz doesn't think a huge government stimulus will help. Better to let things bottom out naturally before regrouping. "Obama's plan will make it worse," he says. "We got into this by borrowing and stimulating, now he wants to borrow and stimulate more."

Sound advice, from a man who knows. The New Deal failed, this one won’t fair any better. Obama should look to what has worked in the past, look at what has stimulated, and entirely saved the economy. Obama should look to Reagan, and his success in fixing the broken Carter economy. Tax cuts work, small government works, capitalism works when you let it run its course, and don’t muddle things up with government involvement.


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