Stock Market: Ready to Fall? - Barrons.com

Stock Market: Ready to Fall? - Barrons.com


What are investors to do?

The government is printing money with abandon and bond rates can only go up. All one can do is find something with retainable value.

It is a huge bubble with the government more concerned about high taxes to support social benefits and heavy regulations to meet the objectives of unions and the left.

Much of Europe today shows what current US government policies bring about - but heck, better not look, it's not the desired outcome.

Look at the doughnut, not at the hole - Irwin Kellner - MarketWatch

Look at the doughnut, not at the hole - Irwin Kellner - MarketWatch
Kellner writes:

"The health of the labor market is best measured by employment, not by unemployment....

...The drop in the unemployment rate from over 10% just after the recession ended to 7.5% today is more a reflection of people dropping out of the labor force than of people finding jobs....

...My colleague, Rex Nutting,pointed out last week that the drop in hours worked in April was the equivalent of a loss of more than 500,000 jobs..."

 It would seem as though mention should be made of the old ratio from the 1980's that found growth in the private economy (read: jobs) needed more money to be left in the private economy both as a reward for and the means to create private jobs. That ratio was the share of GDP taken by government and was roughly 19%.

Regulatory concerns, relative tax rates, labor policies also matter and with respect to the Obama Administration, plus the excess above the above ratio taken by the entitlement state, is something too easily overlooked.

Many European countries talk about a growth agenda for their economies but, these economies are so mired in too high taxes and too much government that they can't afford or support real growth in private jobs.

If a person knows how to create a business plan, one knows that in the private economy what matters is the net after-tax internal rate of return (plus other factors). If the net a/t return isn't there, then the venture isn't begun. 

Government should be looking to maximize this net a/t return for the greatest number of possible entrepreneurs and job creators. Somehow, however, it can't get beyond raising taxes to support its welfare state.

Review & Outlook: Spain and Taxes - WSJ.com

Review & Outlook: Spain and Taxes - WSJ.com

It is amazing how governments and, of course, those who are socialistically inclined, don't realize that entrepreneurs create jobs that are long lasting and that government is a leach.

As such, they need to lower taxes, lower regulations and let those who are and can be successful receive and retain the fruits of their labors.

52% tax rates are anathema to that.

Let's go down to 20% tax rates, easy bankruptcy laws and respect for property rights.

If these tax rates don't pay the socialist bills, then don't pay them.

Otherwise, as is so blatantly shown throughout Europe and the US, people will be jobless, government debts will grow and the day of reckoning will become all that harder.