Unless spending kicks in, economy could remain weak for years to come
In past U.S. recessions, consumers tightened their belts when the economy was contracting, and began spending again once growth returned. This time may be different.
The hope was that the government’s massive stimulus spending program last year would break the economy’s downward spiral and spur businesses to expand and consumers to start spending again.
The stimulus certainly produced the desired effect — over the short run. Economic growth, as measured by the Gross Domestic Product, surged in the second half of 2009 before cooling off in the first half of this year. Until recently, most economists expected the economy to continue expanding by about three percent a year. But in the past two months, those forecasts have begun to edge lower.
“The economy entered the second quarter with plenty of momentum, and exited it with very little,” IHS Global Insight Chief U.S. Economist Nigel Gault wrote in a note to clients Wednesday. “The evidence does not look so poor as to signal the dreaded 'double-dip recession,' but at a minimum it does signal slower growth in the second half of the year.”
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4 comments:
A career and job security are not created by the Feds spending $1 million to repave a 2 mile stretch of road or upgrading the railroad tracks from LA to H. Reid's neighborhood 3 years from now. When the government tries to circumvent the laws of economics the result is always disaster.
its good that everyone is aware of a tiny thing called 'saving money'. hopefully the trend will continue.
If we are going to be so reliant on US consumer spending to buoy the economy, then we need to make sure that it is US made products that we are spending the money on. The Chinese and Germans are doing it right; make stuff and sale it to people outside your country to bring capital home.
To 2:31 pm:
Or we could just get rid of the government all together and we won't have this problem... Or better yet lets get ride of MONEY... Since that's what everything and everyone is about or is trying to take from others... The government is looking for more control and Obama won't stop till he gets it... and the next president, there after will do the same, so it won't end till one or the other is gone... you can tax everyone 100% then what? when you can't pay for the luxuries after that then what?
Think I am wrong, do research and you will see what it's all about...
1. Obama wants a news and internet kill switch, why?
2. taxes for the lower and middle class will raise to 40% over what I believe the current 30 to 35%. Yet upper class gets a whopping 20 to 25% tax on income... (I say tax the rich since they can afford it an already have it)
3. obama Won't close border becasue he says there will be no reason for immigrant reform... "says the border wall won't work"
4. suing Arizona for a law that already exist at the FED level and designed by the attorney general him or her self, but served under bush or Clinton (not sure which one).
5. made BP make a slush fund to pay who ever when ever and there is no cap on what they owe...
6. People who oppose him on a high level get fired or have to apologize or get fired... I.e. the rep senator and the general of the Iraq war...
7. criticized the only auto company (Toyota) I believe didn't need or ask for a handout like Government motors did aka GM... Yet the public to date owns GM and they are currently destroying false records that says they paid back in-full 5 years early on their stimulus loan...
8. the most important one... the health care... if he wanted to reform it, then do it but when you say that EVERYONE has to either have private or public insurance and says you will be fined or jailed if you don't pay... well I call that a capitalist Dictator... capitalist = wants to run everything through government... Dictator = someone who TELLS you how your gonna do what ever you do, i.e health care...
9. wants to raise the age limit of when someone can retire becasue they want to keep your money...
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