The Great Depression in the USA 2008: Advice for Business: Prepare to Cut Jobs and Expenses and Shut Down Businesses.

 There is more than a chance that we will have a major economic depression in the next few months. A casual reading and some research on the following comments, guesses and blather  from some of our government ‘leaders’ begins to make one wonder about  the timing and lack of foresight about  this disaster:

 “…in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme[sic]  was introduced in the 1960s.”[1]The Independent, London, April 1, 2008.

 Is it possible that our phony government is struggling with reality, socialism, poverty, deflation and has no solutions to the problem except spending wasting your tax money on the problem and is pushing the election of some Marxist who will tax everything in sight? Do not believe his $250,000 tax cap. It is a lie.

 Here is some 2007 history from Helicopter Ben Bernanke on Depression and Deflation:

 “So, is deflation a threat to the economic health of the United States? Not to leave you in suspense, I believe that the chance of significant deflation in the United States in the foreseeable future is extremely small, for two principal reasons…[ignore the rest—he guessed wrong]”[2]-- Deflation: Making Sure "It" Doesn't Happen Here.  Remarks by Governor Ben S. Bernanke Before the National Economists Club, Washington, D.C. November 21, 2002

 We face severe deflation now! Look at the prices of stock, oil, cars, houses and more! Are they falling? Where is the bottom? What is happening in Asia, Europe and South America?

“...under a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.”—Bernanke November 21, 2002

Did we notice that the Fed has cut interest rates again? What happens when interest rates of zero do not help the economy?  That means print money-Spend spend spend. Now, Paul Krugman[3] and Barney Frank[4] support this wild spending. Paul Krugman recently [2007] railed against such spending in a predictable political rant [he has nothing else] to criticize Bush for his deficits.[5] He now welcomes frantic spending.

Do we realize that Barack Obama has promised a trillion dollars in new spending for his term if elected?

More background from Bernake on this problem:

“…we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.”—Bernanke November 21, 2002

And, if hyperinflation is the result? That and stagflation is cured only by high interest rates.

“…For example, the Fed might make 90-day or 180-day zero-interest loans to banks, taking corporate commercial paper of the same maturity as collateral.”—Bernanke November 21, 2002

Does this sound like the phony ‘offer’ to ‘loan’ banks our tax money and incur future debt in return for preferred stock? Does this resemble the phony bailouts that cost us first $850 billion and now another $700 billion? We have a new ‘stimulus’ package from Congress coming? Who pays for $300 billion dollar expenditure? Are we up to $2 trillion dollars in new debt this year?

The answer is that everybody that makes more than $42,000 and above will pay for this in some degree and the biggest burden will fall to those with incomes above $182,000 as the New York Times finally admitted. What happened to the $250,000 cap? This hurts the small business community the most—the group that provides 90% of the new jobs for the economy.

Allen Greenspan now wallows in shock, disbelief, and ignorance:

“The former Fed chairman tells a congressional panel that the breakdown of credit markets left him in 'shocked disbelief.' He admits the financial crisis exposed flaws in his free-market ideology.”[6]-- Alan Greenspan Warns Unemployment Will Rise Further By Jim Puzzanghera.  October 23, 2008

How many business people know what the opposite of free-market ideology might be? Government command economies? [7] What are they? How about a successful example of that?  How about the USSR and North Korea?[8] How about tariffs? Is this the end of free markets in the US?[9] These footnotes offer some important and timely business information as to what could happen if the government runs business in the US. High tariffs encourage retaliation by trading partners and foreign business doe what? Oh! Dry up?

“What about the claim, based on Joe the Plumber’s complaint, that ordinary working Americans would face higher taxes under Mr. Obama? Well, Mr. Obama proposes raising rates on only the top two income tax brackets — and the second-highest bracket for a head of household starts at an income, after deductions, of $182,400 a year.”[10][11]—Paul Krugman of the NYT

 What happened to $250,000?

Joe Biden Lies:

“"Read my lips," Biden [this is the guy Plugs ed] said, using Bush's famous phrase while referring to a Barack Obama administration. "Nobody, nobody making less than $250,000 is going to see a penny of their taxes go up."[12]—Biden in an incoherent rant at some county fairgrounds near the campus of Ohio University in Athens on Oct 15, 2008.

Well, to be fair, 182 is sorta close to 250 in liberal terms. How many pennies are there in the difference between $250,000 and $182,000?

Now, a major problem with potential union employees:

The Employee Free Choice Act (EFCA)[13] is a new way for employees to be burdened with unions. The National Labor Relations Act would be amended to “to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes."

Here only  “a majority of employees in a bargaining unit  [must] sign authorization forms, or "cards" “and then the employer is forced to allow a union shop. Barganining ‘units’ may have as few as 3 employees.[14] The employees might be forced to sign these forms in some forum where all can see if and how they vote.  Them employer would be forced to ‘bargain.’  This is fascism at its best.

Your Business Plans must be reformulated in light of the following facts:

[1] The urgent need to cut costs and prepare for the negative lower sales and receipts because of the current deep recession. We face a world-wide recession and worse. Plan ahead.

[2] The need to realize that the impending Obama Government is definitely socialist or perhaps Marxist and will burden all businesses with more mandates, rules, regulations and more for employees.

[3] The fact that taxes for all [even very small] business will soar.

[4] The fact that union featherbedding, work slowdowns and inefficiency will hike costs and ruin many small businesses because of the impending Employee Free Choice Act (EFCA)[15].

[5] The political certainty that Hispanics [and all illegal aliens] will quality for affirmative action programs and quotas will be set thus companies will be forced to hire these people. There may be quotas for gays, perverts, felons, illegal aliens and even leftist government spies. Expect that groups of activists will come around and survey your spaces, employee count, resources and more. They will be watching you.

[6] Credit and investment capital will vanish. The federal debt will rise to 20 trillion dollars and the debt service on that debt at 6-8% interest rates would be 1.6 trillion dollars compared to the current 3 trillion dollar budget. You will have to finance operations solely from savings and cash flow. Businesses with slow cash flow will fail.

[7] The fact that businesses will be forced to pay for $1 trillion in new social programs because their employees will be taxed as well.

The government types such as Paulson, Bernanke and others plan to use inflation to cure this depression. What does inflation do to business?

If Obama is elected in November, you must begin to execute these new business plans because the system is going down.  Many businesses must leave the country or go broke.

Think seriously about this.

rycK [ Chairman, DE Democrats against Biden]

 Comments to: ryckki@gmail.com