Browsing the archives for the overly optimistic economic forecasts tag.



Positive Economic Reports….I’m going to be rich!!!

Economic Policy, Economy, Politics

Adam

I’m not sure where the broad publics’ head is at with recent positive news coming out on the economy. Some commentators I have read lately (and Senators Schumer and Reid) are talking about the economy turning around. The fall has occurred and its all UP UP UP from here… Well maybe there has not been that much optimism from them, but its out there. Does this kind of optimism worry anyone else besides me? Luckily I am not the only one who is worried.

The economy has been taking a hit on a regular basis for quite a while. There is a good description of where all of this positive movement is coming from, but I would rather relate it to a very likely scenario out there now.

Try to imagine that you are an employee at RSPC (The Really Smart People Company) and, in order for the company to continue operations with the existing workforce, all employees are asked to take a pay cut…lets say a 25% pay cut. Okay, you have your pay cut, times are tough, so you just deal with it. When a couple of things begin to go better RSPC decides to give you a 5% raise. The RSPC is ecstatic over the news that they are making a profit in the first quarter of the year and they believe things are turning around. Now, as the employee, are you as excited about that 5% raise, or are you still upset and wary because of the total 20% hit you are still feeling?

Good news is still good, but lets take it with just a little perspective.

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