Economy is Crawling – Scrap the 4% GST, Idiot

While it’s true that the current 5% to 10% service tax will be replaced with the lower 4% GST, the truth is the “comprehensive” coverage in 4% GST will sweep across every item you buy – like a tsunami 

Allright, here are more signals that the global economy will neither skyrockets nor drops like a stone into the ocean. Basically people are convince that the U.S. economy will most likely crawling for years instead of months before the worst enemy – unemployment – is over. We, and to a large extent the Americans, may be lucky that this round of recession did not suffer the same fate as the 1929 Great Depression. But this recession may have created anew economy landscape that we have to live on for decades to come – the scale-of-employment model pre-recession is history and a new employment model may have emerged.

It’s true that layoffs have slowed, at least for now, and (hopefully) the housing problems have bottom. However jobs remain scarce and the economy will not stage a V-shape recovery anytime soon. The fact that the Federal Reserve holds the bank lending rate at zero to 0.25% speaks volume of the U.S. economy’s health. But who can blame Ben Bernanke and his boys when the figures still show consumer spending remains sluggish, hiring remains weak, wage growth is almost stagnant and the banking sector is not lending as much as Obama’s administration hoped they would. 

Low inflation also means companies couldn’t raise prices of their products simply because the once fearless American consumers are not spending as they used to be pre-recession. Of course you shouldn’t blame some of the analysts who predict that 2010 will be an explosive year for the U.S. economy when everything will be back to normal, though I would take that as a new-year wishlist instead *grin*. In actual fact you don’t really have to go very far to ascertain the health of the U.S. economy. The financial sector will tell you whether what those good-for-nothing analysts’ “wishlist” that you should be buying stocks is a good advice.