We can talk ourselves into a depression.

However what I think we are seeing is just the law of gravity: what goes up must come down.

We spent most of the past decade cutting taxes, increasing spending, and telling ourselves that wars  don't count so their full costs really don't need to be shown on the budget....

Now we are seeing that there in fact is NO FREE LUNCH and that the bills do need to be paid.

Taxes will need to be raised, especially at the state and local level. And yes, we will all have less disposable income. Except of course those that can lobby in perks for themselves or their industries so they don't need to pay their share - let the other guys pay it....

The main question here I see is not whether or not there is a "depression" but whether or not we have the intestinal fortitude to do what needs to be done and balance the budget.

And no it can NOT be done just by cutting spending - there is not enough discretionary spending to cut to make up for the orgy of the past few years. We will need to raise taxes.

Do we have the guts to do it or are we going to respond like the lemmings who follow the (loudest) leader off of the cliff?

The fact the sales of the logistics executive in SC's original post were "great" in May, so-so in early June,and dropped in late June may be an indication that folks are tightening their belts. But there will be month to month variations in everything from employment to housing, etc.  Look at the variation between the U of Michigan and confidence board consumer confidence numbers.

We can't let ourselves get in a funk every time a piece of monthly or quarterly data comes out not exactly the way we would like.

I personally see in my travels that motels are fuller, restaurants are fuller, there are more trucks on the roads and many businesses are stabilizing, and some are doing well. Compared to a year or two ago.

Folks are concentrating on what matters and quality. I had a conversation with a successful business man the other day who said that he is putting every bit of cash that he can into savings.  An increase in savings, paying down credit card balances, not getting sucked into unnecessary spending may mean a slow recovery but I feel a more lasting one.

And we do need to start paying our bills as a nation.  Only if we act like the lemmings are we in danger of a deeper recession. In fact there are signs that the slow recovery I see we are on may be in the long run a much more stable one.

I would suggest that maybe you do lock in a profit on 2011 as dt suggests if a price is offered above your cost of production. That is a prudent thing to do and while you will not get rich you will stay in business.

Time to stop here but I get really tired of the "sky is falling" mentality. That type of thinking diverts us from the tasks at hand. One of those tasks is that taxes must go up, in large part to pay for our binge of the past few years. fwiw.

Jim at Dawn