How Bad Is It?

I have mentioned before that WalMart sales have been down for over two years, well, now sales a the dollar stores are slipping.

The upscale stores are all doing better, but now sales at the bottom of the line are in trouble. Customers are buying necessities and nothing else. While the people at the top are getting bonuses, the people at the bottom can’t afford to go to WalMart.

Despite news like this, and the statements of the traders on Wall Street, the looneytarian Local Puppy Trainer put up this – EDITORIAL: Market makes the case for cuts

That queasy feeling Americans had in September 2008, when the bottom fell out of the financial markets, has returned. Is the American economy slipping back into recession?

Last week, the Dow Jones industrial average lost 699 points, or 5.75 percent. After the stock market closed Friday, Standard & Poor’s, one of the Big Three credit-rating agencies, announced it had lowered its rating of the U.S. government’s credit, from AAA to AA-plus. It was the firm’s first-ever downgrading of U.S. creditworthiness from the top rung. Markets plunged again Monday, with the Dow declining another 634 points, before rebounding Tuesday. They were slumping again Wednesday.

Conditions deteriorated last week after Congress passed a bill raising the debt ceiling by $2.7 trillion, to $17 trillion, which was supposed to stabilize markets. The debt number is staggering. U.S. gross domestic product will be about $15 trillion this year.

The market crashed because the government refuses to even discuss the measure that we know will improve the economy, because it has always worked in the past – stimulus, ‘priming the pump’, call it what you will.

The private sector is not going to spend its trillions in cash until demand increases, and demand can’t increase until people go back to work. Government is the ‘spender of last resort’ and it refuses to spend.