"Bush Economy" Heading for a Recession?

The economy is heading toward a recession. New home sales are down 8.5% since July. Prices of new homes have fallen 7.5% from a year ago. Credit is increasingly hard to get for consumers and businesses. All of these are signs that the economy is heading towards a recession.

Ever since Bush's reckless, radical tax cuts, we have heard from his supporters and apologists about how they have helped the economy. Actually, and this is something that presidents of both parties don't want to talk about, but the Federal Reserve Board has more control over the economy than any president. If the Fed makes more money available, it helps both consumers and businesses get loans. They use these loans to buy goods and services, thereby creating more jobs for Americans.

Under Greenspan the Fed basically allowed homeowners to turn their homes into ATM units. Americans borrowed on their equity to finance everything from home remodeling to a new vacation for the grandkids.

Naturally, since Greenspan is a Republican and since Bush is an idiotic Republican, no one thought about overseeing the financial institutions making these loans. As a result, we now have a wave of losses in the billions of dollars from risky loans. Consequently, we see financial institutions, who are apparently led by people who are not real bright given their past history, sharply cutting back on new loans.

If there is a recession, look for three things to happen. One is that Republicans like Bush will push for even more tax cuts under the rationale that we need to "pump" up the economy. Two, Democrats will do even better next year than anticipated. Three, illegal immigration will become even more potent as an issue because of economic insecurity among working class Americans.