Where is the US economy headed?

Key statement in the following news report:
http://money.cnn.com/2010/01/29/news/economy/gdp/index.htm

"But even with the strong growth in the second half of 2009, the economy shrunk by 2.4% last year. That was the biggest drop in 63 years and first annual decline for the economy since 1991."

2 Replies

@okie,

If the second half and/or the fourth quarter indicate a trend, I can live with that, in spite of the annual decline. I mean, this is much better than a great first quarter, but followed by declining trends, isn't it?

1 Reply

@okie,

okie wrote:

Key statement in the following news report:
http://money.cnn.com/2010/01/29/news/economy/gdp/index.htm

"But even with the strong growth in the second half of 2009, the economy shrunk by 2.4% last year. That was the biggest drop in 63 years and first annual decline for the economy since 1991."

Perhaps it's the only part which gives you some political comfort, Okie.

Tell me: are you rooting against the economy getting better? You know it will help Obama and the Democrats if it does.

Cycloptichorn

0 Replies

@roger,

Maybe, but I think it takes more than 2 quarters to indicate a long term trend. If somebody goes on a diet and gains 10 lbs in 6 days, but then loses 5 lbs in the next 6 days, that person has not made any progress over the 12 day period. Maybe losing 5 lbs. in the last 6 days is a trend, but the trend is too short term to draw any conclusions about the success of the diet regimen. For example, the weight loss in the last 6 days may represent only the easy weight to lose, of the previous 10 lbs added in the short term. It is entirely another matter to sustain weight loss from weight that has been carried over a period of months or years. You can lose weight in one day by simply not drinking fluids, but you cannot sustain that pattern, you will need to eventually take fluids for the longterm health.

I think the same principle applies to the Obama economy. Although it is kind of an inverse correlation to the economy, the same principle as my diet example applies when you consider the factor of inventories carried by the business world. The following article will explain it better than I can. I understand this because I am as a matter of fact involved in a business with inventory, and 2009 was greatly influenced by the fact that inventory was drawn down significantly, I think similar to the business world overall, but when you do that, you will eventually have to pay for that strategy and expend the resources to once again increase inventories, but that depends upon customers and long term health of the economy in order to be sustainable as a long term trend.

http://www.senseoncents.com/tag/decline-in-drawdown-of-inventories-in-4th-quarter/

"The 4th quarter GDP report came in this morning at a surprisingly strong 5.7%. However, like many other things in this Uncle Sam economy, not everything is as it appears. For that very reason, I wanted to wait to write about this report until I monitored the market’s reaction. Let’s navigate.

The question for the economy, and in turn the markets, is to what degree the supposed growth embedded in the 4th quarter GDP is sustainable. To determine that, people need to appreciate the fact that this 5.7% GDP figure was driven to a large extent (60%) by a slowing in the drawdown of inventories. Are you scratching your head wondering what that means? Let’s just reduce it to the fact that drawing down inventories is not exactly a driver of growth at all."

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Quote:

The surviving investment banks are bristling at efforts aimed at recouping taxpayer losses and forestalling a repeat of the panic of 2008: congressional proposals to tax bonuses, President Obama's planned tax on large banks' liabilities, and his suggestion that banks be prohibited from using taxpayer-insured funds for proprietary trading. That last proposal would " restrict lending, increase risk, decrease stability in the system, and limit our ability to help create jobs," says Steve Bartlett, CEO of the Financial Services Roundtable, the trade group for megabanks.

But if the banks want us out of their business, they should get out of our business first. We've (barely) lived through a 40-year period in which investment banks have imposed themselves on us. They effectively moved into our house, raided our fridge, and set the joint on fire. Now they're complaining that our renovation efforts are cramping their style.

http://www.slate.com/id/2242964/

WELL SAID!

1 Reply

@hawkeye10,

hawkeye10 wrote:

Quote:
The surviving investment banks are bristling at efforts aimed at recouping taxpayer losses and forestalling a repeat of the panic of 2008: congressional proposals to tax bonuses, President Obama's planned tax on large banks' liabilities, and his suggestion that banks be prohibited from using taxpayer-insured funds for proprietary trading. That last proposal would " restrict lending, increase risk, decrease stability in the system, and limit our ability to help create jobs," says Steve Bartlett, CEO of the Financial Services Roundtable, the trade group for megabanks.

But if the banks want us out of their business, they should get out of our business first. We've (barely) lived through a 40-year period in which investment banks have imposed themselves on us. They effectively moved into our house, raided our fridge, and set the joint on fire. Now they're complaining that our renovation efforts are cramping their style.

http://www.slate.com/id/2242964/

WELL SAID!

They aren't lending right now! They already take huge risks, they don't give a **** about the stability of the system.

What a crock

Cycloptichorn

1 Reply

@Cycloptichorn,

Quote:

They aren't lending right now

no they are not, for the most part. Remind me again what we bought for our $1 trillion plus in direct aid, plus with all the other gimmicks? Profits are good again, but what have the Wall Street banks done for America lately.......why do they deserve to live?

1 Reply

@hawkeye10,

hawkeye10 wrote:

Quote:
They aren't lending right now

no they are not, for the most part. Remind me again what we bought for our $1 trillion plus in direct aid, plus with all the other gimmicks? Profits are good again, but what have the Wall Street banks done for America lately.......why do they deserve to live?

Preaching to the choir there brother. The truth is that they don't do nearly as much for our society as they would have people believe. They aren't necessary for slow, steady investing; only for crazy risks and 'financial products' of questionable value.

Oh, and for leveraging the fortunes of the rich to be even bigger. They are sort of important for that.

Cycloptichorn

0 Replies

Conservatives keep repeating the obvious, that Obama could start with Fannie and Freddie, the corruption, and the practices there, mandated by the Democrats, that helped start this entire meltdown to start with, but of course we see nothing, absolutely nothing in that regard, the Democrats and government continue to ignore their own responsibility in this entire mess. They instead prefer to point fingers at others, when they need to look in the mirror.

I want Republicans to point this out every day in the upcoming elections.

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AGAIN!
John Kennedy: "Every dollar released from taxation that is spent or invested will help create a new job and a new salary."

Scott Brown: "That’s what we need now, across the board tax cuts. A payroll tax cut would have been better than any government stimulus. "

Ican: "Reducing the tax rate on the wealthy allows the wealthy to invest or spend more of their money. When the wealthy spend or invest more of their money, they make all of us who pay taxes more wealthy by providing us more opportunities to earn more, and provide the government more income (i.e., receipts)."

Reagan in 1982 cut Carter's maximum income tax rate from 70% to 50% and then to 38.5% and then to 33%. Since then, the maximum tax rate has remained below 40%. Since 1982, total jobs grew from less than annual average of 100 million to more than an annual average of 145 million in 2008. In 2009, jobs decreased to an annual average below 140 million because of excessive government borrowing from the private sector. Since 1987 to the present the maximum tax rate has remained below 40%, BUT federal tax receipts have increased annually since 1987 to the present"except for the years 2001 to 2004. Furthermore, GDP has increased annually up to and including 2008.

1 Reply

Quote:

Dr. Edward Hudgins, who directs advocacy and is a senior scholar at The Atlas Society, took part in a recording of "The Stossel Show" on January 28, 2010. The topic of the show is"The Road to Serfdom." Ed explained the problem of excess government and discussed the phenomenon of "Going Galt". Another featured guest was pro-freedom film producer Thor Halvorssen
The Fox Business Channel will broadcast the Stossel Show featuring Ed on Thursday, February 11, 2010. The show is broadcast Thursday at 8:00pm Eastern Time with various rebroadcasts. Check your local listings. Don't miss it!
A look at America today suggests that the country is on the same path to destruction that was the core of the plot in Ayn Rand's Atlas Shrugged. But many producers are protesting their treatment-see the signs at Tea Parties and town hall meeting--or actually escaping their persecutors.

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@ican711nm,

ican, have you seen the linked article by Daniel Henninger in the WSJ? In the article "THE FALL OF THE HOUSE OF KENNEDY," He describes how people are growing tired of the "machine" or "blob", referring to the growing government bureaucracies and their employees and supporters in this country, and that perhaps the election of Scott Brown signals a backlash against that machine that has fostered more debt and control over peoples lives. The article is really a fantastic summary of what has happened in this country, with Henninger pointing out how John F. Kennedy planted the seeds for much of the growth of government when he issued the executive order to allow unionization of government employees in 1962. I have quoted one statement that I think really sums up what the political battle is about, but the article is full of great lines that capture alot of truths.

http://online.wsj.com/article/SB10001424052748704320104575015010515688120.html?mod=WSJ_Opinion_BelowLEFTSecond

"The central battle in our time is over political primacy. It is a competition between the public sector and the private sector over who defines the work and the institutions that make a nation thrive and grow. "

2 Replies

@okie,

Yes, okie, I saw the article by Daniel Henninger in the WSJ, "THE FALL OF THE HOUSE OF KENNEDY." Thanks for the reminder.

Quote:

http://online.wsj.com/article/SB10001424052748704320104575015010515688120.html?mod=WSJ_Opinion_BelowLEFTSecond
Scott Brown's victory in Massachusetts will not endure unless Republicans clearly understand the meaning of "the machine" that he ran against and defeated.

Yes, it is about a general revulsion at government spending, what is sometimes called "the blob." But blobs are shapeless things, and in the days ahead we will see the Obama White House work hard to reshape the blob into a deficit hawk. Unless the facade is ripped away, the machine will survive.

The revolt against the machine began with voters' 2006 ouster of the Republican majority in Congress for making a mockery of fiscal rectitude. An angry electorate then swept Barack Obama into office. Now Mr. Obama is saying voters elected him on the same wave of anger that elected Scott Brown. Sorry, but Messrs. Obama and Brown are not surfing in the same political ocean.
...
Enter the Obama administration, the first one born and raised inside this public bubble, with zero private-sector Cabinet members. Act one: a $787 billion stimulus bill, which they brag mainly saved state and local jobs. Then came the six-month odyssey for Obama's $1 trillion health-care bill, dripping with taxes. Independent voters felt like everything was being sucked into a public-sector vortex.

This is why New Jersey's Chris Christie won running on nothing. It's why in California Carly Fiorina is within three points of Sen. Barbara Boxer. It's why the party JFK enabled, "the machine," is hitting the wall.

1 Reply

@ican711nm,

It's as if John Kennedy did not understand that by increasing fed outlays he discouraged continuation of the release of dollars from taxation by tax rate cuts:

John Kennedy wrote:

"Every dollar released from taxation that is spent or invested will help create a new job and a new salary."

0 Replies

"Watchdog: Bank Bailouts Created More Risk in System
The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department."

http://www.foxnews.com/politics/2010/01/31/watchdog-bailouts-created-risk/

0 Replies

@okie,

okie wrote:

http://online.wsj.com/article/SB10001424052748704320104575015010515688120.html?mod=WSJ_Opinion_BelowLEFTSecond

"The central battle in our time is over political primacy. It is a competition between the public sector and the private sector over who defines the work and the institutions that make a nation thrive and grow. "

0 Replies

http://www.reuters.com/article/idUSN1416882220100203

January job losses are only at 22k. This is the lowest level in 2 years and the forecast for next month is for job gains.

You Republicans on this thread better pray that this doesn't happen and that the economy doesn't improve between now and Nov. when the elections happen, because you are going to be in big big trouble if it does. You've spent so long claiming that Obama and the Dems own this economy that you never stopped to think about how it would bite you in the ass later.

Cycloptichorn

1 Reply

@Cycloptichorn,

Where are the jobs, in government?

1 Reply

@okie,

okie wrote:

Where are the jobs, in government?

Private sector bro. Look it up for yourself - and then tell yourself that you aren't cheering against Obama succeeding and secretly hoping the economy doesn't get better.

Cycloptichorn

1 Reply

@Cycloptichorn,

I doubt it, cyclops, and if it is private sector, it is as a result of doing government contract work, which will not last, it will dry up once Obama gets done with the spending binge and the government is so broke that it cannot keep spending at the same pace.

I am hoping the economy gets better when it has reason to get better, when people begin hoping the next election will turn things around. The economy can improve based upon future outlook, and if people begin to think Congress will be changed in a big way next fall, the market will begin to come back a little by mid year, I think, but of course who knows. This would be a similar effect as when the market and the economy began to sink when it became more and more apparent that Obama would win, and so far that outlook was a very accurate prediction, as his policies have utterly failed so far.

1 Reply

Where is the US economy headed?

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