With all the negative news we are bombarded with on the economy it’s a wonder that we haven’t all just thrown in the towel, moved to the woods and begin preparing for the coming apocalypse. Although unemployment is hovering near 10%, the dollar is down against the world’s major currencies, our deficit and debt are at an all time high, and the housing market continues to flounder, there is actually some good news about the economy.
As a financial advisor, the first place I look is the stock market. As you may know, the stock market tends to be “forward looking” – meaning that it’s usually an indicator of where the economy is headed rather than where it is been. It is not a predictor; rather it reacts to a set of concrete data and variables without emotion. The Dow Jones Industrial Average (the price weighted average of 30 heavily traded stocks) opened the year at 8776.39. As of today, it is at 9731.25, a nearly 1000 point gain and a 3261 point gain off of its November, 2008 low of 6469.95. That is good news. Wealth is being built.
Two other important indicators are the Institute for Supply Management (ISM) Non-Manufacturing Sector Index (health care, utilities, construction, retail, etc.) and the ISM Manufacturing Index. Both sectors of the economy showed growth in September. This is good news. Economist Larry Kudlow does this story much more justice than I can, so I encourage you to read his thoughts here (http://bit.ly/avLt9).
I raise these points for this reason: the American economy is unbelievably resilient! While economic news has been less than stellar, we are far from a third world economy. We remain the largest economy in the world and that statistic is not even close (http://bit.ly/2UWG3U). Our economy is on the road to recovery, but it will be a bumpy ride.
Having said that, do not let anyone tell you that the “stimulus plan” is the reason for the modest recovery we are experiencing and will experience. The vast majority of stimulus dollars have not been spent and many of those dollars that have been spent have gone to “projects” that won’t stimulate anything but the growth of government (www.recovery.com). The reason our economy is slowly recovering is because of natural business cycles that occur, the hard work of the American people, and most importantly, free market capitalism. It is the latter that has increasingly come under attack, and if the liberal progressives have their way, these attacks and subsequent action will either stall this recovery or send us into another recession.
Nancy Pelosi, Barney Frank, Brian Baird, and other liberal progressives in Congress are proposing legislation that, if enacted, will destroy the modest recovery that has begun. If so-called Cap and Trade legislation becomes law, it will be devastating to America’s manufacturing sector. Which means it will effectively end any chance of bringing quality, family-wage jobs to Southwest Washington – a part of the country that has a nearly 15% unemployment rate.
Furthermore, all indications are that Pelosi and company are going to let the Bush tax cuts expire. This will serve as a massive tax hike on the American people and will take much needed job creating capital out of the economy. This will occur at a time when we need more capital for job creation. Capital gains taxes (which I believe are a tax on success and smart planning) will increase from 15% to 25%. And marginal tax rates (our income taxes) will increase across the board. So much for not raising taxes on the middle class.
Finally, the “health care reform” legislation that is being proposed will increase our ever expanding deficit ($1.4 trillion to end this fiscal year). Future generations are being saddled with massive deficits and unsustainable debt for a bill that won’t solve the problem of reducing health care costs and improving access. Of note, the Baucus bill being proposed in the Senate will leave 25 million people uninsured according to the most recent CBO scoring.
Friends, our current economic woes are not the result of too little spending; instead, they are the result of too little economic growth. The best way to reduce the unemployment rate is obvious – create more jobs. The best way to accomplish this is by reducing the tax rates on American businesses and let them invest and grow. (See: Kennedy tax cuts, Reagan tax cuts, GWB tax cuts). Time and time again it has been proven that reduced tax rates lead to increased revenues to the federal treasury. Yet big government proponents like Baird and Pelosi continue to experiment with the same policies that drove our country into economic purgatory during the miserable Presidency of Jimmy Carter.
We must – all of us – hold our elected officials accountable. Remind them that every dime they take from our pocket and use to add or expand unnecessary government programs is an assault on our liberty. Do not let anyone tell you that you’re greedy because you want to keep your own money, instead of watch the government waste it.
We know that it is our responsibility to provide for our families and take care of our communities. And quite frankly, we are capable of doing that without government intervention by means of redistribution of wealth.
I am running for Congress because I am tired of the failed policies and rhetoric of liberal progressives who are slowly (actually more quickly this year) subverting the American way of life. I will be a new voice for people who still believe in the greatness of America and our people; a voice for all Americans, present and future, who choose to control their own destiny and who believe, as I do, that our best days lie ahead. www.castilloforcongress.com