IMHO:
I think you may have overestimated the ramifications of higher taxes and the removal of the payroll tax holiday. PLENTY of people in this country can still afford to spend... and it is that consumer spending that is the primary driver of the american economy.
I do not doubt that reducing public spending will be a negative... but that reduction is dwarfed by consumers ability to spend.
10% unemployment and subprime mortgage defaults make for scary headlines, but the middle class... and most importantly the upper middle class, still has plenty of ammo to spend.
One of us will be proven right in the next ...oh, say 12 months.
I will admit to my foolishness if we do see a recession here in the States, and bow to your better insight.
Quick note: I have worked in the commercial real estate industry for 25 years... both on the equity side, and now the lending side.
Over the last three months I have begun to see something that I have not seen in 3 years: Construction loan requests to build major office buildings, hotels, malls, apartment buildings, etc.
Things are starting to pick up...I see it every day.
-Dan
