Friday - August 27, 2010

And Down We Go Again

Economic Growth Rate Downgraded to Anemic 1.6 Percent in Second Quarter

The Commerce Department is revising downward the economic growth from April to June to 1.6 percent—a decline from the original 2.4 percent forecast and much slower than the 3.7 percent of the first quarter 2010.

The barely-there number isn’t enough keep pace with population growth, which needs about 3 percent annualized growth just to break even each year and prevent unemployment, currently 9.5 percent, from rising.

The trade imbalance—the largest since 1947—took away nearly 3.4 percent from second quarter growth, the Commerce Department said.

The current quarter isn’t expected to show much improvement, with many economists forecasting growth of only 1.7 percent.

Economists say the number could be a taste of weakness to come—and fears of a double-dip recession are growing.

“The odds of the third quarter being negative look reasonably high,” said Kevin Hassett, senior fellow and director of economic policy at the conservative American Enterprise Institute. “Fifty-50 chance.”

The economy has grown for four straight quarters, but that growth has averaged only 2.9 percent, a weak pace after such a steep recession.

Hassett put the blame squarely in President Obama’s lap.

“The policies have been so terrible that they sort of feel to me like the choices of an excessively arrogant, uninformed person, and his economic policy team doesn’t match that description, at least part of it,” he said.

But Josh Bivens, an economist for the liberal-leaning Economic Policy Institute, said the massive $862 billion stimulus helped prevent the economy from declining in the last quarter.

“Without the stream of spending provided by the Recovery Act the economy would have contracted outright. This is most troubling, as Recovery Act money is almost spent and will provide no boost to growth going forward. The case for more action from policymakers to support the recovery and return the job-market to health is now overwhelming,” he said in a statement.

Business investment in new machinery, computers and software, increasing at 25 percent in the second quarter from the first, is credited with much of the growth last quarter, but the benefit is tempered by the fact that much of that spending paid for imported products.

Imports surged 32.4 percent, the most since 1984. That overwhelmed a 9.1 percent increase in exports.

A report earlier this week showed that business orders for capital goods fell in July, suggesting that business purchases will decrease this quarter.

Josh Bivens, an economist for the liberal-leaning Economic Policy Institute, said the massive $862 billion stimulus helped prevent the economy from declining in the last quarter.

“Without the stream of spending provided by the Recovery Act the economy would have contracted outright. This is most troubling, as Recovery Act money is almost spent and will provide no boost to growth going forward. ”

“The case for more action from policymakers to support the recovery and return the job-market to health is now overwhelming,” he said in a statement.

“support the economy” means another stimulus. “return the job-market to health” is a grand idea, but borrowing zillions to fatten up all the far-left groups and rainbow farting unicorn feeding projects isn’t going to do it.

Cut business taxes. To ZERO. Cut capital gains taxes. To ZERO. Throw out ObamaCare, throw out Crap & Traitor, beat the crap out of the EPA and loosen many of these severely restrictive regulations, eliminate the Department of Education and leave that to the states, cut the Department of Energy down to about 50 people, cut the federal government by 75%, cut state governments by 50%, put a $65,000/yr salary cap on every single unelected government job and make them pay a fat slice of their health insurance just like the rest of us, no unions anywhere in government, secure the borders and start shipping trainloads of illegals back across the border. Eliminate most of the H1- visas. Bring the troops home from everywhere but the DMZ in Korea - the administration won’t fight to win, so stop wasting our blood and treasure. Stop the utterly insane spending at the Defense Department. Not a dollar in foreign aid, anywhere. Let the world take care of it’s own for once. No more international disaster rescue efforts. Immigration moratorium for 10 years. Severe import tariffs? Not yet, but float the idea. Get some nationalism going; Buy American, even if that’s a Honda built here. Close enough. Drill our own damn oil, and start building nuke plants all over the place. And yes, we’re going to have to make severe cuts in unemployment benefits, welfare, Medicaid, and Medicare. Bush’s prescription drug deal has to go. We can’t afford it.

The business of America is business, and until the government gets out of the way, and gets rid of foreigners doing jobs Americans would like to do, we are going nowhere but down. We’d all be fat and happy if a third or more of our GNP didn’t go to China and Mexico. Cut the taxes and loosen the rules so that more things get made here. By our people. Bought by our people. For our people. So that we shall not perish from this earth.

Posted by Drew458     on 08/27/2010 at 10:26 AM   
Filed Under: • Economics •  
• Comments (1) • Trackbacks(0)  Permalink •  

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