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Sun Apr 29, 2012, 12:53 AM

Government cuts slow economic recovery

Source: Seattle Times

WASHINGTON The U.S. economy expanded at a sluggish 2.2 percent annual rate from January through March, the government said Friday in a confounding report that spotlighted the continuing challenge of spurring strong growth.

Most forecasters had expected growth in the 2.5 percent to 3 percent range. The disappointing first-quarter number mirrored the closely watched March jobs report, which also fell short by adding only 120,000 jobs after a string of stronger months.

While the headline number for gross domestic product the sum of goods and services produced in a year was short of expectations, the report's component parts offered rays of hope. They showed consumption remaining strong in the private sector, while continuing reductions in government spending dampened overall growth.

Federal government spending dropped 5.6 percent, with military spending down 8.1 percent. Spending by state and local government dropped by 1.2 percent. If only private-sector components of the GDP are taken into account, the economy grew at a 3.5 percent annual rate, according to Alan Krueger, head of the White House Council of Economic Advisers.

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Read more: http://seattletimes.nwsource.com/html/businesstechnology/2018090175_econ28.html

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Response to jpak (Original post)

Sun Apr 29, 2012, 12:57 AM

1. "military spending down 8.1 percent"

 

Interesting.

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Response to jpak (Original post)

Sun Apr 29, 2012, 12:59 AM

2. And it will get much, much worse starting January 2013

That's the start date of the pea-eating orgy agreed to during last year's fully-fake debt ceiling crisis. The government's getting the @#$% slashed out of it.

Great stuff, really great stuff.

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Response to MannyGoldstein (Reply #2)

Tue May 1, 2012, 03:10 AM

13. +1000000

Conveniently after the election.

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Response to jpak (Original post)

Sun Apr 29, 2012, 01:56 AM

3. It Did Have A Mild Slam On Government Austerity During Weak Growth

One item I am surprised they didn't mention was the drop in oil and gas production due to the very mild winter and the need for far less heating oil and natural gas. Yes, it meant that more money was available for spending elsewhere, which is a positive, but it's also a drag on GDP because not all of it would have been spent elsewhere (some would have gone to savings, debt reduction, etc.).

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Response to DallasNE (Reply #3)

Sun Apr 29, 2012, 10:27 AM

10. Nice realism in your comment

And you are correct. Consumer spending is up by quite a lot less than the amount of the decrease in oil and gas.

In reading a report on railroad tonnage I saw a justification about decrease in tonnage saying that a portion was due to a large decrease in coal, and that the decrease in coal was due to a mild winter. I wonder about the accuracy of that. How much coal is used for heating in this country today? I would guess just about zero. Coal is used for generating electricity. How much is electricity used for heating? well, certainly some, but enough to justify that much of a drop in coal? Maybe, but I have my doubts.

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Response to jpak (Original post)

Sun Apr 29, 2012, 02:09 AM

4. (1) UK in double dip recession after austerity budget,

(2) this story...

so libertarians/conservatives...name ONE country that prospered from austerity. PLEASE!

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Response to alp227 (Reply #4)

Sun Apr 29, 2012, 02:12 AM

5. They don't believe in countries, they want to set up their fiefdoms. This is working for them.

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Response to jpak (Original post)

Sun Apr 29, 2012, 03:19 AM

6. As I like to say...

if you keep cutting a tree, it will never have the chance to grow.

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Response to jpak (Original post)

Sun Apr 29, 2012, 05:04 AM

7. Reagonomics....( supply side nonsense) will die one way or the other...

 

40 years of failure is not enough to convice the Republican mindet... it will all have to come to a complete collapse before they let go. Even then.. they will refuse to see the facts.

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Response to lib2DaBone (Reply #7)

Sun Apr 29, 2012, 06:59 AM

8. The saying goes

Success has many fathers, but failure is an orphan.

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Response to lib2DaBone (Reply #7)

Sun Apr 29, 2012, 08:15 AM

9. Except that republicans don't consider the "supply side" canard a failure

It's worked quite well for them. They pay no taxes while amassing vast fortunes.

The US has become a third-world country in many important ways. It is viewed as merely a country from which to extract resources to feed multinational corporations and foreign countries who then sell products back to us -- the very definition of third-world. Example: Washington State is building ports to ship millions of tons of coal to China every year.

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Response to PSPS (Reply #9)

Sun Apr 29, 2012, 07:40 PM

11. Yes.. for the 1%.. everytihing is GREAT!

 

Proof positive.. (to them) that we can survive as a country by doing each others laundry and mowing lawns.

We can wash their cars, baby-sit their kids, serve them meals... all for less than minimum wage.

Just try and complain.. they will smash your cell phone camera and pepper spray you while you stand in their "Free-Speech" zone.



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Response to jpak (Original post)

Tue May 1, 2012, 12:31 AM

12. Any way you slice it GDP is on for a nose dive.

 

The federal government is spending around 40% more than it brings in from taxation. Either spending is cut by half or tax revenues are increased to cover the spending. There are no other options and anyone that try's to blow smoke up your ass and tells differently must be running for political office.....

EITHER option is going to kill the economy. The money is going to be removed from GDP one way or another, we can not continue to BORROW it in an effort to SOLVE AN OVER LEVERAGED ECONOMY.

Sure "tax the rich" sounds like a plan but it ain't going to cut it. I am amazed that the idiots on the right think LOWERING taxes is possible.

The problem is the ass-hats of BOTH political parties are trying to solve a simple math problem politically. Continued borrowing only makes the inevitable worse, I think we need to "eat our peas" right now instead of pushing the debt we are accumulating in a misguided effort to "pretend" we are in recovery off on future generations.

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Response to Cronkite (Reply #12)

Tue May 1, 2012, 05:19 AM

15. How about we cut military spending in half and still have the largest

military might in history? Or how about taxing corporations especially for taking jobs out of the country? Or how about we stop subsidizing mega billionare oil companies? And then how about rebuilding this country physically, like it's bridges for starters?

Just a few thoughts about how it IS possible to actually do smart things.

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Response to lunatica (Reply #15)

Tue May 1, 2012, 09:19 AM

17. It isn't really about WHERE we cut.

 

Sure, the military is bloated, there are tax loopholes for corporations that have bought politicians......

My point is that as of right now GDP is 12% overstated (probably 25% overstated when considering the multiplier effect of the BORROWED MONEY).

WHEN (not if) this borrowing is stopped we will have an immediate contraction in our economy. This can not be avoided.

Raising taxes removes this money from private GDP. Cutting government spending in ANY AREA of government will lower the government component.

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Response to Cronkite (Reply #12)

Tue May 1, 2012, 06:05 AM

16. New revenues (taxes) and reduced spending.

.... are on the horizon, they HAVE to be.

As I've been bleating here for 5 years, everyone that thinks the worst is over or that there will soon be a "recover" is sadly mistaken.

While the economy languishes it has not been for the want of trying with more gov't spending. It's not working and it's not going to work. And eventually we will have "austerity", not by choice and not because it is some great policy, it will be forced on the gov't and us by simple math.

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Response to jpak (Original post)

Tue May 1, 2012, 05:14 AM

14. Riddle: What gets bigger the more you take away from it?

That big fat hole they keep digging us all into.

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Response to jpak (Original post)

Fri Jun 1, 2012, 03:11 AM

18. Re: Government cuts slow economic recovery

An analysis of the first three months of this year showed a lowering of consumer distress as new hires increased across the nation and the housing market picked up.


You can read more updates here: Consumers face increasingly less financial distress

Because of increased hiring and a decrease in mortgage foreclosures, the economic recovery seems to be picking up steam. The brand new Consumer Distress Index, which analyzed information from the year's first quarter, reaffirms those findings. Well, I guess it's about time for the United States to wake up from slumber due to economic crisis. It's about time for us to seriously deal with the economic crisis that we have. I just hope that this year would be a better year for us.

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Response to jpak (Original post)

Fri Jun 1, 2012, 03:30 AM

19. 'If only private sector components of the GDP are taken into account,

the economy grew at a 3.5 percent annual rate.'

SO we're already in positive territory BUT FOR governmental-imposed or required 'austerity.' (This is Federal AND state and local, of course.)

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