The Commerce Department on Friday will revise its estimate for economic growth in the April-to-June period and Wall Street economists forecast it will be cut almost in half, to a 1.4 percent annual rate from 2.4 percent.
That’s a sharp slowdown from the first quarter, when the economy grew at a 3.7 percent annual rate, and economists say it’s a taste of the weakness to come. The current quarter isn’t expected to be much better, with many economists forecasting growth of only 1.7 percent.
Such slow growth won’t feel much like an economic recovery and won’t lead to much hiring. The unemployment rate, now at 9.5 percent, could even rise by the end of the year.
“The economy is going to limp along for the next few months,” said Gus Faucher, an economist at Moody’s Analytics. There’s even a one in three chance it could slip back into recession, he said.
The report confirms the economy has lost significant momentum in recent months. Most analysts expect the nation’s GDP will continue to grow at a similarly weak pace in the current July-to-September quarter and for the rest of this year.
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. The economy needs to expand at about 3 percent just to keep the unemployment rate, currently 9.5 percent, from rising.
According to data released earlier this week, home prices fell as much as five percent across the country in the month of July, and existing home sales fell 27%.
The worst in 15 years.
But if you listen to the liberals and their pundits, it slow but it’s all good. You just to have more hope. Give it more time. Don’t be so impatient.
So what if GDP growth has gone for 5% in the last quarter of 2009 to 1.6% now it’s still improving!
And you wouldn’t to hand the keys back over to Bush now would you!
After all, Bush was Republican and all Republicans are Bush. (a gold star to anyone who can spot the logical fallacy in that statement
) But isn’t that what the Democrats ARE saying…Cue Sisyphus!
Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.
All of this is obvious. Yet policy makers are in denial. Why are people who know better sugar-coating economic reality? The answer, I’m sorry to say, is that it’s all about evading responsibility.(Paul Krugman)
After all, it’s Bush’s Fault! and you wouldn’t want
After all, Bush was Republican and all Republicans are Bush.
And as Mr Krugman also says, showing his liberal roots,”The administration has less freedom of action, since it can’t get legislation past the Republican blockade.”
The Democrats currently have an overwhelming majority in the House and 59/100 seats in the Senate and The Presidency.
Yet, it’s a “republican blockade”.
The problem is that the Democrats can’t get all the Democrats to vote for all of this crap so they have to blame the minority party for it!
It sure as hell can’t possibly be their fault!
So, if November happens as predicted and the Democrats are the minority, it will be the tyranny of the majority then right?
They will be the victims yet again, as they are now in the majority. Perpetual Victimization!
But the Democrats will focus again on the 1 tree in the forest that isn’t on fire and say that’s you’re hope and change, just be patient, socialism wasn’t built in a day!
On Thursday, Standard & Poor’s said action is needed soon if the U.S. is to keep the much-coveted AAA bond rating that lets the government borrow in global markets at the lowest rates possible.
S&P’s warning came just days after Morgan Stanley asserted that the U.S., along with a number of other developed nations, is likely to default on some debt. Such defaults are “inevitable,” it said, given the growing number of retirees in developed nations who will have to be taken care of by a shrinking pool of workers.
The sovereign debt crisis “is not over,” said the investment bank’s Arnaud Mares, and that includes in the U.S.
What worries Wall Street is a public debt-to-GDP ratio of around 53%. That’s high enough as it is, but it’s about to go a lot higher. By 2020, recent data suggest, the ratio will top 100% — a red line that virtually all economists agree is dangerous.
In raw numbers, we owed roughly $7.5 trillion at the start of this year. By 2020 that explodes to $23.5 trillion, according to an analysis of Congressional Budget Office data by economist Brian Riedl.
What do these numbers mean? To begin with, we spend $187 billion a year, or 1.3% of GDP, to pay our debts now. Just 10 years from now, that will surge to $1.1 trillion, or 4.8% of estimated GDP. Fiscally speaking, we’ll be gasping for air.
Debt can be a good thing, but in big doses it’s poison. If, as some fear, the U.S. should simply say it can’t pay its debts and default — or do a de facto default by printing money to retire our debt — the consequences would be dire.
No nation would want our bonds in their portfolios. To entice them to buy, we’d have to offer a much higher risk premium — that is, higher interest rates.
That means our debt service could go even higher, squeezing out even more of our economy’s spending.
The dollar would implode, and prices for foreign goods — which now make up 15% of our economy — would soar. Private investment would shrink and, along with it, private-sector GDP
Americans’ standard of living, once the envy of the world, would recede into the pack of mediocre, government-run nations.
It doesn’t have to be this way. All this is due to unrestrained spending. The federal government now spends about $29,000 per household. That will rise to $38,000 by 2020. If you think “the rich” will, or can, pay for it all, think again.
Unless we begin to control spending, we can kiss our American lifestyles goodbye. It’s that simple.
Sadly, the White House is unwilling to see reality. Which may explain why, as our debts mount to ruinous heights, Vice President Joe Biden — President Obama’s point man on the recovery — can burble, “This is a chance to do something big, man!”
Yeah, man, something big — like wreck a country.
Warnings about America’s impending financial car wreck are being sounded, loud and clear. The only question is whether those driving the car will slam on the brakes before it’s too late.(IBD)
Got the car out of the ditch and drove it straight off a cliff and into a bottomless pit!
Way to go Barack & Co!
Yours is the Superior Intellect!
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