The debate is on as to whether we're headed for a double dip recession.
Given what's happening in Europe, a double dip recession is a real possibility. And with few jobs being created in the United States, something that sent US market into a tail spin, investors are saying there is a big risk now of a double dip.
In his blog, former Clinton honcho Robert Reich says the jobs data shows the US is headed into a double dip recession. Consumers don't have the money and companies won't rehire because there's not enough demand because consumers don't have the dough. Basically, the US economy is on life support and the only thing that is keeping the wolf from the door is the government spending.
Reich writes: "The only reason the economy isn't in a double-dip recession already is because of three temporary boosts: the federal stimulus (of which 75 percent has been spent), near-zero interest rates (which can't continue much longer without igniting speculative bubbles), and replacements (consumers have had to replace worn-out cars and appliances, and businesses had to replace worn-down inventories). Oh, and, yes, all those Census workers (who will be out on their ears in a month or so). But all these boosts will end soon. Then we're in the dip.".
The only thing that might save the US economy would be another stimulus package but politically, that would be hard to get up.
The only other alternative, says Reich, is to extend tax credits and tax the rich. Not a bad idea, but Obama will struggle to get that up politically.
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