Two of my favorite economics blogs are Carpe Diem and Calafia Beach Pundit. Both are rich with information and perspectives from professional and experienced economists. For months both of these writers have highlighted numerous indicators that the economy is bottoming out and starting to improve. Traffic at ports, railroad freight activity, hotel room bookings, and other such indicators have shown improving economic activity.
Yet employment stats are not only not budging, by some recent indicators it is getting worse. It seems obvious to me that this is because of legislation, regulations, and a Congress that seemed to have a limitless appetite for using political power to control the economy. Businesses see no consistency in the rules they must live by and thus are sitting on tons of cash unable to find a decent return.
The Fed can drop interest rates to zero and this economy will still resist growth as long as it is staring at endless regulations and no certainty on taxes and regulations.
This is far more damaging than a tax increase. In fact if Congress could possibly pass a tax code that was guaranteed not to change for twenty years you could raise the taxes (though it is still ill advised) and still create a tremendous stimulus.
Add a guarantee that Cap and Trade and Union Card check is dead for two decades and repeal the health care bill and this economy will take off like a rocket. Stabilize the dollar and cut spending, starting with the prudent elimination of Fannie Mae and we would have genuine economic euphoria.