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Economic Recovery-the Southwest Inn at Sedona Weighs In

 


Why is the current Economic Recovery so slow?

As a practicing CPA, down in the trenches, I can attest that each of the above economists are a little bit right, but they are missing the two most salient points on what is holding back the economic recovery.  As seen during daily audits, consumers are not spending like they were, because of the linguring debt overhang; and, business are not investing, because of the Washington Disconnect.

The Southwest Inn at Sedona is a Boutique Hotel in Sedona Arizona, squeezed in between Las Vegas, Nevada and Phoenix, Arizona, just south of the Grand Canyon; and in one of the hardest hit regions in the United States.  The thought of four more years, like the last four is of great concern.  The Southwest Inn has previously published a blog on our opinion of the causes of the financial collapse; and, we have published a humerous-realistic reason behind the credit economy that failed; and, we have posted a link to a video that appears to be sadly true.

  • Richard Duncan lays out his conclusion that our economy grew out of credit-debt, and blew up because of credit-debt though his use of numerous government charts.  Many of the businesses that I have worked for have felt this false economy for the last decade, but were victems, unable to get off of the roller coaster.  And, this is where John Taylor is absolutely correct is his criticism that without consistent and long-term policies, businesses cannot survive.  Just imagine at half time, if the officials told the pass-happy New England Patriots that the rules just changed, and they could no longer throw passes??
  • Why has Washington been so anxious to "bail out" those individuals who were NOT making payments on their debt, and leave the responsible individuals fending for themselves?  The conclusion, reached by Reinhart and Rogoff calls for some kind of overall debt restructuring, in order to get the economy back on track; but, the charts in Duncan's book show this has not happened.
  • Paul Krugman displays a telling chart in his book, that answers the question-"where did all of that money used for stimulating the economy go?"--his chart clearly shows that banks are sitting on record reserves.
  • Now comes the Washington Disconnect:  yes, the banks are flush with cash reserves, however they have also been engulfed in the regulations of the Dodd-Frank bill that affectively prevents the banks from lending these funds into the business sector. 

The question that we must ask each of the candidates for the upcoming presidential election is: which candidate, former Governor Romney, or President Obama will be able to unlock the Washington Gridlock over the Small Business Administration that will release funds into the market place?

After watching the recent debates, and witnessing first hand, from the trenches, and looking at the decrease in SBA activity in the last four years, perhaps it is time that we tried a businessman in Washington.

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