3 - VELOCITY AND THE V-SHAPED RECOVERY by ProQuest

VIEWS: 5 PAGES: 3

More Info
									                                                                      Growth Strategies Group is a consulting firm
                                                                      which uses trend research to assist organizations
                                                                      in responding to outside challenges, mapping
                                                                      strategies, and pursuing their visions for future growth.


 Trend Analysis That Builds Business Decisions


 2 – t h e en D OF PROsPeRIt Y

The tanking of the US economy in the 1930s and                 unquestionably the global winner in the race for
1970s demostrates the dangers of the four killers              capital around the world. America soaked up some
of prosperity and bull markets. Those killers are:             $5 trillion in net capital investment from around
                                                               the world. These growth policies also attracted
■    Trade protectionism.                                      human capital. And the United States became
■    Tax increases and profligate government                   the world’s premier economic superpower.
     spending.
                                                               Today, [however], there is a widespread con-
■    New regulations and increased government                  sensus of opinion that tougher times lie ahead.
     intervention in the economy.                              Employment is down, income is down, housing
                                                               values are down, family incomes are down, and
■    Monetary policy mistakes.                                 consumer confidence is in the tank. If in this
In the 1980s and 1990s and early 2000s most of                 precarious financial environment a new Congress
the obstacles to growth were cleared away. Taxes,              decides to impose tax increases, the effect on our
tariffs, regulations, and inflation weren’t elimi-             economy could be devastating.
nated, but they were tamed. The unmistakable                   The danger is imminent and very real. Major tax
trend over the period was toward stable prices,                increases will occur if Congress does nothing; the
a dependable and strong currency, lower and                    Bush tax cuts will expire after 2010 if nothing is
flatter tax rates, a lighter hand of regulation in             done to extend them. The capital gains tax rate
key industries ranging from financial services to              will go up; the dividend tax rate will go up; the
transportation to telecommunications and energy,               death tax will jump from 0% to 55% in 2011.
somewhat moderate levels of federal spending,
welfare reforms that rewarded work over dependency,            In these automatic tax increases we have the mak-
the elimination of most price controls, and so on.             ings of an economic calamity.
Without these interferences the economy blos-                  [Arthur Laffer, Stephen Moore, Peter Tanous, The
somed and US industries reawakened from the                    End of Prosperity: How Higher Taxes Will Doom the
wicked spell of stagflation. The United States was             Economy – If We Let It Happen (2008)]

 3 – V eL OCIt Y An D the V- shAPeD Re COVe RY

The US econo
								
To top