Wednesday, September 21, 2011

Running out of ideas on economy-2

And what does the government do change this, another stimulus package (which has slim chances of passing the debt weary Congress). This time it is tax, cut and spend (not the usual Tax and spend), but again the Republicans and not ready to come to grips with the tax and spend policy, although they are ready with the cut phase of the stimulus). And the FED is also trying to jump in the ship with its own stimulus because they are concerned with the sluggish pace of job growth. But we have been all through this before and we have not seen any noticeable impact on the job market. Although it is not going to happen but the overburdened regulation and sluggish demand is what is holding back the economy this time around.

The world has moved on to better things but we are still stuck with burdening our businesses with more regulation. To comply with this is more expense rather than income and the businesses don’t want extra employee to have more regulation to comply with if they can make do with the one they have now. Labor costs due to overregulation is high as compared to other countries and if we want to compete, we would either have to have reduced regulation or lower standard of living since all the companies are doing now is to outsource their business or lower the salaries of their entry level employees. As many have seen the government have run out of ideas to stimulate the economy and we should not expect much from them in the coming months or years as overregulated businesses and heavily indebted individuals hold tight the money they can get their hands on.

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