Deflation....

I think this article does a decent job of explaining this.

http://www.frontlinethoughts.com/gateway.asp

Simple solution that will actually make a difference to our economy longterm: Eliminate Corp taxes for 2 years, reinstate them in 2011, with at a 50% decrease to current rates. (18%, instead of 34.9%).

XJEEPER said:

Simple solution that will actually make a difference to our economy longterm: Eliminate Corp taxes for 2 years, reinstate them in 2011, with at a 50% decrease to current rates. (18%, instead of 34.9%).

Click to expand...

It won't work. No one will hire and expand a business with demand dropping, they will instead lay off employees, and cut expenses where they can to improve profits, if they can. Lower taxes have no effect if you are loosing money and claiming no taxes due since you lost money.

Ecomike said:

It won't work. No one will hire and expand a business with demand dropping, they will instead lay off employees, and cut expenses where they can to improve profits, if they can. Lower taxes have no effect if you are loosing money and claiming no taxes due since you lost money.

Click to expand...

Based on the assumption that all companies are in the crapper and losing money.........problem with the whole process is, that world governments seem to only care about their special interests, and not much about the overall economy of the country that they represent.

In simple terms, widespread corruption and greed has created our current situation. It's present in our government, as well as corporately, too often a team effort of both.

If they really cared, the would seek out and take the advice of financial consultants and ecomonists with a track record for making business profitable and turning them around when off-track and losing money.

The article make some great points......yet we instead have elected officials stealing money from our great-grandchildren who aren't even born yet in a futile attempt to make a short-term difference.

Funny, aren't any of them educated enough to see what triggered the Great Depression, and then not do the same exact thing that extended it clear to WW II?

Guess not, because all they do is throw more of our money into the fire..........:flame:

Some of you may find this enlightening to read, it is about M3, money velocity, the real issue. I hope the link works.

http://www.frontlinethoughts.com/gateway.asp

Just finished read this:

"
On Tuesday, the Labor Department will report on the November consumer price index. With gasoline prices falling another 30% or so, economists surveyed by MarketWatch expect the CPI to fall 1.4% after a 1% drop in October.
A decline of 1.4% would be the lowest since 1938, and if it falls even a tenth more than expected, it would be the lowest since February 1933, when Hoover was packing his bags to leave the White House."

from:

http://www.marketwatch.com/News/Story/Story.aspx?guid={AB194334-CB9E-4B69-9AF4-9866D4E15E5B}&siteid=nbih

Also from what I have been reading, it looks like huge numbers of chemical plants world wide are shutting down due to inventory build ups, and dried up demand, and the problem of letters of credit not being offered by banks to support shipping.

The Baltic Dry index (relates to demand for shipping, and ships) is at rock bottom.

And this bad news:

http://www.processingmagazine.com/news/12/2008/965/Dow-Chemical-to-slash-5,000-jobs,-close-20-plants

"Dow also will temporarily idle 180 plants and prune 6,000 contractors from its payroll."