Jesse Mobley

Double Dipping Isn’t Cool At Parties or With the Economy



Posted: Friday, August 05, 2011

by Jesse Mobley
EconomistNow

The show Seinfeld puts it best when explain double dipping: “It’s like putting your whole mouth right in the dip. Look, from now on when you take a chip, just take one dip and end it.” But this article isn’t about the socially-peculiar moments when you catch some double dipping at a party, rather it’s about the near future of our economy. Probabilities for a “double dip” in the market have definitely lowered over the past year or so, but we are not clear by a long shot. The status today stands much like the Leaning Tower of Pisa.

Consumers continuing to worry about their financial futures (remember that consumer spending accounts for over two-thirds of overall spending), firms scared to invest, banks on their heels about lending, and government organizations cutting back employment are just a few examples of recent events that have the power to create one small shock which could push the economy back into the ditch. Prices at the pump, for example, which is one of the most significant components to our economy, have recently jumped up to almost $4 a gallon and could easily be another small shock to set the economy back into the recession. Other worries such as European debt crisis, Chinese economic slowdown, and most importantly the shift of government policies in the coming years are even more possible disturbances which could trickle into a slowing up of our economy.

However, I believe that the change in government policy will be highly influential in the short term. Over the past four years, many branches of government have adapted policies to help the economy regain strength and ensure recovery. With plans to cut financial assistance to the private sector, these government institutions will now attack the problems of the federal deficit, the dollar, and inflation. In doing so, the private sector will have to learn to walk on its own—not with a brisk wind at their back, but rather head-on. Plans to patch up the federal deficit, the dollar, and inflation are dangerous and conflicting when an economy is still struggling to get it together, which is why I rank government policy swing as “public enemy number one,” but I don’t disagree totally with the oncoming changes.

In the past years, billions of dollars have been pushed into the market, and with these policies there has been growth which has led many to believe the coast is clear, but in reality it isn’t. On the other hand, it has created rather high levels of uncertainty which has made recently sound markets a little volatile as we hopelessly await the cutting of financial aid. Some economists say, “That things are going to get worse before they get better,” but I am optimistic that the market will create some level of balance to once again lead our economy back on the right path.
Jesse Mobley

Founder and Chief Editor of EconomistNow

Vice President of HopeWater LLC

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