The President's Speech

The film "The King's Speech" was about a man who faced a serious problem, knew what it meant to the nation and knew what he wanted to say. The drama centered on whether he could physically say it. The President will soon discuss his new plan to improve the economy. He certainly will say it well, the drama will be in what he believes and how that will be translated into action.

Interest rates were lowered to provide more liquidity to the economy. Money was pumped into the economy by the government through spending programs to increase liquidity in the economy. Interest rates are now almost zero and cannot be lowered further. Liquidity has been increased by trillions--TRILLIONS--of dollars. Economic activity is still low and unemployment is still high.From all indicators the economy is sliding back into recession.

What is the next step? We can't lower rates and another stimulus sounds silly. The only real intense government plan around is the notion of raising taxes, taking liquidity out of the economy.

This economic speech the president plans should be fascinating.