Health Care

Well Gang the aye's have it and we have a new monumental piece of legislation. The stock market yawned. Investors hate the uncertain. They are happier dealing with the certainty of this new program than with the uncertainty of will it or won't it. Now they have the opportunity to begin to figure out exactly what is in this bill and how it will affect our economy. They will invest accordingly.




The bill passed on Sunday and the market was up Monday and today (Tuesday). Certainty, atleast as the health care bill is concerned, has led investors to be a bit more confident or at least less fearful. As the details get processed the market could decide differently, but for now it appears happy that its over.



The economy is still in the dumpster. There are small signs of hope but there is no jobs turn around in sight. Housing prices are still declining nationally and sales, although better than 2009 are still anemic. There is little up lifting to be found in the various economic data that comes forth daily. On Thursday the impotant data will be the number of people filling for unemployment for the first time. The newly unemployed. The consensus opinion is that fewer claims were made last week than in previous weeks on average. Retail sales are showing some life with year over year gains of 3% or more. Of course 2009 is a low base for a benchmark but at least it is moving in the right direction.



Gasoline has been up lately, with the national average for regular at $2.82 per gal. Locally we have been paying $2.75 per gal. Locally that is about $.78 more than last year. This has to have a negative affect on other retail spending. It is an extra $20 a week or so for most of us. Maybe Congress should reinstate the tax deduction for federal gasoline tax like we had in the 1960's. At least then we could get a portion of it back instead of paying taxes with money leftover from income tax. But I dream.



Gasoline will likely continue to rise through July 4th and then begin to retrench, probably to $2.25 or so during the fall. Long term outlook, however, is that gasoline will continue to rise baring a huge oil field find. Remember the USA alone consumes 19 million barrels (798 million gallons) of oil per day, of which will pump only 40% domestically. A major import problem.



National debt is rising by the minute and sooner or later the interest rate will begin to climb. At the point that interest begins to rise we will see the country squeezed and taxes will have to be increased further. Raising taxes is contraindicated when trying to reboot the economy.



Housing prices are reported to have declined 3.3% year over year. This is the core problem and progress on this issue has been slow to come about. Until it is fixed, I remain convinced, the economy will progress at the pace of a loggerhead turtle on the beach.