OK, the GDP allegedly grew by 1.9% (less than the 2.4% forecast) WITH the stimulus checks....

[marmar]

..... So what happens when the "effect" of the stimulus checks wears off? :scared:



via Yahoo!:


Growth weaker than hoped; economy shrinks in Q4
By JEANNINE AVERSA, AP Economics Writer
5 minutes ago



WASHINGTON - The country didn't get the energetic rebound in economic growth hoped for from the government's tax rebates in the second quarter, and the economy jolted into reverse at the end of 2007, raising new recession fears.

The Commerce Department reported Thursday that gross domestic product, or GDP, increased at an annual rate of 1.9 percent in the April-to-June period. That marked an improvement over the feeble 0.9 percent growth logged in the first quarter of this year and the outright contraction in the economy during the final quarter of last year.

Still, the second-quarter rebound wasn't as robust as economists had hoped; they were forecasting growth at a 2.4 percent pace. The pickup, while welcome, isn't likely to be seen as a signal that the fragile economy is growing healthier. There are fears that as the bracing tonic of the tax rebates fades, the economy could be in for another rough patch later this year.

On Wall Street, the Dow Jones industrials were off nearly 75 points in morning trading following two days of gains.

The health of the economy is the top concern of the public — and by extension politicians including candidates vying for the White House.

GDP contracted by 0.2 percent, on an annualized basis, in the last three months of 2007, according to annual revisions released by the government. ......(more)

The complete piece is at: http://news.yahoo.com/s/ap/20080731/ap_on_bi_go_ec_fi/economy

[Muttocracy]

1. If people use it to pay exisiting debts, or regular expense so they don't put it on credit card

does that do anything to GDP? I guess the bank gets the real money instead of the credit card debt?

I think most of the stimulus was swallowed by higher food and energy costs, just delayed the inevitable shock.

[Winterblues]

2. With inflation at it's highest point in thirty five years

One would think our GDP would be very high. It isn't, which shows in reality an actual loss. We all know prices have gone up more than 1.9% so why hasn't the GDP?