Economic Rebound Slowed Last Quarter

Discussion in 'Economy' started by boedicca, May 27, 2010.

  1. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Hardly surprising: economic growth UNEXPECTEDLY was less robust than forecasted last quarter.

    Well, that's what happens when the government increases spending and taxes, grows the size of government relative to GDP by 25% in 18 months, and increases debt to 90% of GDP. Oh, and when so much money is taken from the private sector that it doesn't create Real Productive Jobs and U6 unemployment remains near 17%.

    The economic rebound last quarter turned out to be slower than first thought, one of the reasons unemployment is likely to stay high this year.

    The economy grew at a 3 percent annual rate from January to March, the Commerce Department said Thursday. That was slightly weaker than an initial estimate of 3.2 percent a month ago.
    The new reading, based on more complete information, also fell short of economists' forecast for stronger growth of 3.4 percent.

    The reasons for the small downgrade: consumers spent less than first estimated. Same goes for business spending on equipment and software. And, the nation's trade deficit was a bigger drag on economic activity.

    In a separate report, the Labor Department said Thursday that the number of newly laid off workers filings claims for unemployment benefits fell by 14,000 to 460,000 last week. The decline came after claims had risen by a revised 28,000 in the previous week, the largest gain in three months.

    The latest level of claims is slightly higher than it was at the start of the year. That shows the nation's workers are still facing tough times even though the overall economy is growing again.

    During normal times, growth in the 3 percent range would be considered healthy. But the country is coming out the longest and deepest recession since the Great Depression. So economic growth needs to be a lot stronger - two or three times the current pace- to make a big dent in the nation's 9.9 percent unemployment rate.

    Economists say it takes about 3 percent growth to create enough jobs just to keep up with the population increase. Growth would have to be about 5 percent for a full year just to drive the unemployment rate down 1 percentage point.

    After the last severe recession in the early 1980s, GDP grew at rates of 7 to 9 percent for five straight quarters and the unemployment rate dropped from 10.8 to 7.2 percent in 18 months.



    My Way News - Economic rebound slowed last quarter


    Reagan growth rates: 7-9%

    Obama's growth rates: 3-5% (and cooked with bogus cash for clunkers)

    Reagan's Polices are Mo Mo Bettah than Obama's.

    Just SAYIN'.
     
  2. Neubarth
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    Neubarth At the Ballpark July 30th

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    Even more frightening is the fact that M3 is contracting. This does not bode well for the future.
     
  3. manifold
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    manifold Diamond Member

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    Hey, try not to sound so thrilled about it ok douchebag? :thup:
     
  4. Queecho Feecho
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    Queecho Feecho Rookie

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    Would you mind going into a little more detail no why you find a contraction in M3 to be frightening?

    The biggest reason I see is that so much of our economy is backed by debt, so when money supply contracts, debtors wind up defaulting. Am I oversimplifying or ignoring something else significant?

    Thanks
     
  5. Toro
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    Toro Diamond Member

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    Economic growth first five quarters under Reagan: -1.8%.

    Under Obama: +3.3%.

    Of course, if you think the two periods are comparable, you don't know much.
     
  6. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    You aren't comparing the proper periods. The clock starts when the recovery began. The recovery during Reagan's term was far more robust than the anemic Obama era one.
     
  7. Toro
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    Toro Diamond Member

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    Oops. I forgot to change to quarters. Actual growth first five quarters:

    Reagan -0.45%
    Obama +0.81%
     
  8. Toro
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    Toro Diamond Member

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    First, the comparisons between the two time periods are completely fallacious.

    Second, you cannot have it both ways. Either you judge both Presidents by the same standards or you don't. If you judge the economy as soon as Obama comes into office as a reflection of his policies and believe it is causal, then you do the same thing for Reagan. You don't say "We will ignore Reagan's first year but we won't for Obama."

    Finally, the economy fell back into recession in the summer of 1981 and stayed there until the end of 1982. Reagan presided over the longest recession since The Great Depression.

    Now I am not making the causal relationship. But highly political people do. They put far more emphasis on politics than is warranted. And if you are going to do that, you better understand the data and historical context.
     
  9. Neubarth
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    Neubarth At the Ballpark July 30th

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    The only proper comparisons as I have stated thousands of times are in the direct efforts of the president to promote employment. Obama has done almost nothing while Reagan started talking about a 600 ship Navy. We really did not need a 600 ship Navy, but it did put people back to work and slowly got the economy rolling again.

    Obama needs to put my pet project to work. We need to open up farm land, and he does not understand why. I keep on telling him that farm products are the only way we can cut into the balance of trade deficit. That is too difficult for him to understand, so he has nixed the program to divert Missouri River watershed to the west to put millions of acres under cultivation.
     
  10. Neubarth
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    Neubarth At the Ballpark July 30th

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    What recovery? We are still losing jobs.
     

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