Should You Continue Looking For A Lucrative But Legitimate Home Based Business Opportunity As The Economy Improves?
During the past few months, many corporate employees have experienced job loss, job insecurity, and job dissatisfaction. A few months ago, the U.S. economy appeared to be falling off a cliff.
But today things have changed. Maybe there is no longer a need to establish a job backup plan and consider a legitimate home based business opportunity.
Now things seem to be stabilizing. At least, that is what the federal government and the Federal Reserve are telling us. It was just reported that 123,000 non-census jobs were added in the month of March. Many economists are saying that we are experiencing a V-shaped recovery and are optimistic about the U.S. economic upturn going forward.
One of the issues our economy faces today is the problem of commercial real estate loan losses. This is adversely affecting many regional banks.
However, Treasury Secretary Timothy Geithner advises us to not worry about commercial real estate losses and claims that this problem can be managed. The President Obama administration thinks their spending policies have gained complete control of all problems in our economy.
It is true. The economy appears to be on the mend. Most economists claim that we have left the recession far behind. The only question now is how quickly can the U.S. economy recover? Few people are even thinking about further economic problems down the road.
But there are some serious roadblocks to economic growth that most people are ignoring.
A little over one month ago, the President Obama administration presented its budget to Congress that showed a .6 trillion deficit, the largest in this country’s history. It projected a .3 trillion deficit for 2011 and large deficits for the following years through 2020.
The Congressional Budget Office (CBO) is the non-partisan agency responsible for reviewing congressional budgets. It recently stated that the Obama administration had grossly underestimated the deficits going forward by .2 trillion.
Instead of the Obama administration starting to gain control of the deficits, the CBO indicated that deficits would grow rapidly after 2015. The national debt would rise to 90% of the gross domestic product and borrowing needs would soar.
But even the CBO numbers are probably very understated. For example:
It projects no recession anytime in the next decade. But in fact, a recession in the next decade is very likely.
There will be no rise in unemployment expenditures funded by the federal government.
There will be no reduction to foreign investment in our government debt.
There will be no increase in our borrowing cost (higher interest rates) despite the massive increase in our borrowing needs.
Both the Obama administration and the CBO have underestimated the budget deficits. Here is a more likely scenario:
1. These massive deficits will increase interest rates (the cost of U.S. borrowing), driving budget deficits even higher.
2. Massive federal borrowing, along with higher interest rates, will actually edge businesses and consumers out of the market. Because companies are unable to borrow, they are forced to reduce expenses. As a result, businesses suffer a loss of revenues and profits over time. The federal government is forced to borrow more to offset the tax revenue shortfall due to the decreased earnings. Interest rates and borrowing costs rise even further, resulting in larger deficits.
3. The increased borrowing needs and higher deficits result in foreign governments having an increasing lack of confidence in the U.S. ability to make good on its financial obligations. This causes a reduction in foreign investment in U.S. government bonds.
The Federal Reserve must step in to make up for the lack of foreign investment. It does this by printing money out of thin air.
As a result, foreign governments have even more concern regarding the financial stability of the U.S. economy. This leads to further reduction in foreign investment. The Fed must print more money to deal with this shortfall, worsening the financial problems even more.
4. The federal government reaches a point where it can’t borrow more money without increasing interest rates further. It can’t raise more tax revenue without major financial hardship to U.S. businesses and citizens. It cannot print more money without serious devaluation of the dollar and resulting massive inflation.
5. The U.S. government has no choice but to make a significant reduction in federal expenditures. This leads to a major economic downturn.
So if you still have a job, should you still consider a legitimate home based business opportunity? I think you should.
You can ignore the events that are transpiring in the global economy. You can put your faith in the wise and all-knowing actions of our federal government.
But that will be a major mistake. My suggestion is to have a job backup plan in the form of a lucrative but legitimate home based business opportunity. You can continue working in your current job but have an insurance plan in place in case the economy suffers another serious downturn.
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Article from articlesbase.com
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