As we begin to peel back the onion and look at what the latest economic numbers are really telling us, the numbers are concerning.
Although the GDP grew 3.5 percent in the third quarter, this may not be a harbinger of good things to come. From James Pethokoukis with Reuters:
Although the GDP grew 3.5 percent in the third quarter, this may not be a harbinger of good things to come. From James Pethokoukis with Reuters:
While the new report showed the economy shifting into recovery mode, it looks like a pretty anemic expansion. As the economics team at IHS Global Insight see things, temporary factors such as cash for clunkers (accounting for nearly half of the past quarter's growth) and the homebuyers tax credit artificially inflated growth during the past three months. The firm puts underlying growth in the economy at closer to 2 percent than the 3.5 percent.So how does 2 percent real growth compare to growth coming out of previous recessions? Not so good, according to Pethokoukis:
Indeed, during the first quarter of the last 10 economic recoveries, real GDP rose a far more impressive 5.8 percent on average. For instance, the first five quarters of the Reagan Boom coming out of the 1981-82 recession showed GDP growth of 8.1 percent, 9.3 percent, 8.1 percent, 8.5 percent, and 8.0 percent.Artificially induced growth by massive government spending is not the road to recovery and certainly not the way to create a sustained economic expansion.
I totally agree with your last statement. Just before the final days of the 'cash for clunkers' program, the business section of my newspaper ran a story touting the happy news of more sales in the auto industry. Now, I'm no financial expert, but even I had to laugh as the only reason for increased sales was the 'cash for clunkers' program! Governmental incentive cash influxes into the economy do not equate to improvement in the overall economy. Why would any thinking person consider those to be "economic indicators" of positive gains?
Two thumbs up on the blog post! Another thing I would like to add. As the economy "pick up", consumer confidence increases and consumer spendings' up. We will be faced with a double whammy of inflation and joblessness!
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With an illegitimate political system and an illegitimate government in place. The elites are the ones that are giving us a hard time with not much other options. Revolution can only be one of the solutions.