Economy entering Recession Part 2?

For tens of millions of Americans, one fact tells them all they need to know about the economic crisis: They either cannot find a job, or they can get only a part-time job when they really need full-time work.

Their pain is immediate and intense: They wonder how they will provide food and shelter for their families -- let alone how they will begin to set aside something for retirement. Whether they call the current conditions a "recession" or "economic weakness," they know things are bad.

We have the utmost concern for the unemployed and the "underemployed."

But those of us who do have full-time jobs also can see the signs of economic distress, even if it has not come down on us quite so hard individually.

With consumer confidence at its lowest level since the final months of the Carter administration, there is growing anxiety that the United States is rapidly heading for a new recession -- or may already have hit one.

Here are a few of the latest economic difficulties facing the American people:

• While gas prices have fallen a bit, overall consumer prices rose in July by the largest amount -- 0.5 percent -- since March, and prices are up 3.6 percent from a year ago.

• As prices have been rising, average hourly pay has dropped 1.3 percent over the past year. "It's bad enough that workers are not getting any pay increases, but the surge in retail prices is cutting into spendable income," one economist noted in an Associated Press article.

• The stock market has been swinging wildly -- up some one day, then down a lot the next. That is creating uncertainty that is likely to further reduce spending and economic growth.

• The Federal Reserve is alarmed enough about low economic activity to have stated recently that it will not raise interest rates at least until the middle of 2013. The Fed hopes that that is going to spur borrowing and spending by businesses and consumers -- but very low interest rates up to now have not really accomplished that.

• In three of the past four months, sales of homes have dropped in the United States. Home sales in 2010 were the lowest since 1997 -- and yet they are on pace to be even lower in 2011.

• European Union bailouts of bankrupt Greece apparently have failed to halt Europe's economic slide, which has a direct effect on the United States' economy as well. Our big trading partner Japan -- whose government, like the United States, has tried in vain to spend its way out of recession -- is in deep trouble, too.

It is no coincidence that these conditions have appeared or at least worsened during a time when the federal government has been more and more intrusive in the economy.

Washington has approved heavy "stimulus" spending and imposed excessive regulations on businesses of all sorts -- but then it has faulted businesses for not investing and creating jobs! Why would they do so under such circumstances?

Congress and the president can't have it both ways. If they want companies to expand and grow jobs, they should back off and let the free market work the way the Constitution envisioned.

Upcoming Events