Slow Growth 1.4%
Aug 27th, 2010 by David Anderson
The economy is slowing. Government is still spending but the very short tax incentives are expiring leaving growth to evaporate. The lesson is that a stimulus bill like the Republicans proposed last year based upon stable tax cuts would have given the economy what it needed at half the cost. 3 times the jobs at half the cost was dismissed by the Christmas Tree Keynesians in the Democrat Congress. Now we have a trillion dollar bill and not much to show for it.
Many analysts say the uncertainty surrounding the economy is holding back consumers from spending and companies from investing and hiring.
Consumers can’t be sure their jobs are safe, with unemployment so high. Business executives don’t know if sales and profits will grow enough to justify adding jobs. And potential changes to tax laws at the end of this year and other policy reforms also make it hard to plan ahead, economists say.
“People have been overwhelmed by uncertainty,” said Ethan Harris, an economist at Bank of America Merrill Lynch.
A big reason the government will mark down its estimate of last quarter’s gross domestic product is that imports surged much more in June than expected. GDP is the broadest measure of the economy’s output and covers everything from auto production to haircuts.
Imports rose by 3 percent to just over $200 billion in June, while exports fell to $150.5 billion, pushing the trade gap to almost $50 billion, the biggest in nearly two years. Friday’s report may show that the higher imports knocked as much as 3 percentage points off second quarter growth, economists at Goldman Sachs estimate.
Here’s how the logic will play out in big government progressive la-la land. A conservative economist will point out the slowing economic growth is partially attributable to the expiration of bubble re-inflation gimmicks like Cash for Clunkers and the home buyers tax credit. The gov’t subsidized “buy stuff with other people’s money” programs only moved sales forward and did not create a lasting cycle of consumer activity. Stimulus programs were inefficient allocations of money and only provided a short-term sugar high for the economy.
The liberal economist will respond to all of this by saying “So what you’re saying is that government stimulus is the only way to get the economy moving again. We need more stimulus, but this time much, much bigger! How about a $3 trillion “cash for whatever the hell you want” stimulus program? Luxury cars (American made, natch), DVDs, NFL season tickets, and machines that go “ping.” You want it, we’ll help you buy it. Bad credit, no credit? No problem! It’s only taxpayer money, anyway. Plenty more where that came from, right? The Chinese will lend it to us; they know we’re good for it.
Mort Zuckerman, yes, the slavishly genuflecting, media executive/speechwriter Obamabot, just called this administration and this Congress, the most fiscally irresponsible in US history!
Looks like the D’Rats are jumping off the ship as fast as they can.
Now I’m really confused, Obama just told us within the last month at his last bloviation that we were in full recovery and added almost as an afterthought a tidbit about all the jobs that he had saved.
Wait, this can’t be, some of my neighbor’s homes are being foreclosed on this week. That can’t be, Barak promised!!!
Some of the people in Georgetown are still waiting for their bailout check from their Messiah but are having a hard time getting enough food stamps to eat on.
But you just don’t understand! It’s Bush’s fault. They inherited this mess. Bush left a worse mess than we ever thought. Without Obama, unemployment would be sixteen percent! Whine, Whine, Whine…..
Don’t worry, they’ll be gone soon.
“Change…has come…to America”
Rick – I expect you would understand “slow growth”
but you know – they have a little blue pill for that – your hero Rush has had some success with it…
altho when the market is “soft” its difficult to get “hard” facts…
Oh I forgot – there are “stimulus” packages for folks like you with the “slow growth” problem too
apply to….the Bunny ranch??
Why am I not surprised that Apo has exactly nothing of substance to offer this discussion?
Obviously, I am her ‘Moby Dick’…remember, in Melville’s classic, the great whale swam the Pacific of the monomaniacal Ahab’s tormented brain.
Yay! The economy is slowing down, what a relief.
Could it do otherwise under Obamanomics?
“I don’t know what Obamacare is going to cost, I don’t know about ‘cap & tax and excessive regulation,’ I don’t know how much my income tax is going up, I don’t know if they’re going to flush more money down the toilet via a 2nd ‘stimulus’…gee, I think I’ll expand my plant and hire 200 people”