Tuesday, January 12, 2010

U.S. Chamber Warns of 'Double-Dip' Recession Because of Dem Policies

U.S. Chamber of Commerce President Tom Donohue warned the U.S. faces a double-dip recession because of the taxes and regulations under consideration by the Democratic Congress and President Barack Obama.

“Congress, the administration and states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for a double-dip recession, or worse,” Donohue said in a speech providing the Chamber's outlook for 2010.

Donohue said the lawmakers should not let former President George W. Bush's tax cuts expire at the end of year and lambasted Democratic efforts on healthcare and financial regulatory reform as well as climate change, reports Ian Swanson.

Donohue criticized a separate tax on banks floated by the administration on Monday, and said that the rationale for any tax increases would be increased spending, not lowering huge budget deficits exacerbated by the recession.

“We are talking about a massive tax increase in a very weak economy — a tax increase whose clearly intended purpose is not to reduce the deficit, but to pay for more spending,” he said.

He also promised the Chamber would be more involved in the 2010 midterm election than it has been in any other before, and will hold accountable lawmakers who vote against the group's priorities.

Of course, a recession is generally first and foremost a monetary phenomena, but as I pointed out earlier when featuring some CNBC comments, the current environment makes it very difficult for businesses to add employees since they don't know their cost structures, given the likely new taxes and regulations ahead.

Donohue is going beyond this and pointing out the suffocation to the economy that will occur once the new taxes and regulations are known. It's not a pretty picture.

1 comment:

  1. All of these "double-dip" talks are only meaningful in relation to the stock market. The real economy is still in a depression.