How Is This Economy Going to Keep Growing?

• Report this Comment On January 27, 2010, at 1:21 PM, goalie37 wrote:

  Very nice article. There is one ray of hope though, however slim. Since the consumer makes up such a large part of GDP, consumer psychology is key. Hearing the headline number is about as deep as most people will dig. Hearing 5.5% growth will spur some spending. Hopefully that will begin to give us the demand we need.

• Report this Comment On January 27, 2010, at 3:25 PM, marktreat wrote:

  Morgan,

  Excellent article. The problem with consumers now is that GDP growth is not predicated on meaningful gains, but rather a synthetic form of reinvestment. In most areas, unemployment numbers are terrible, but in Washington D.C. they have the lowest unemployment. If the government can't collectively stop the bleeding of jobs, the % of government GDP will have to cover what consumption and investment fail to contribute. It is impossible for a government % of GDP growth to exceed that of consumption and investment, without losing the basic freedoms that come with the limited governance of a Republic.

• Report this Comment On January 27, 2010, at 9:26 PM, xetn wrote:

  I think a more apt title for this article would have been "When Is the economy going to start growing?"

  Government interventionism is preventing a real correction from happening and prolonging this depression. We have by some estimates as much as 22 % unemployment (when using the original determinates for the statistic). We are still losing jobs every month. The main source for increased profits by business has been cost-cutting procedures (including layoffs). Have a look at:

  http://www.shadowstats.com/

• Report this Comment On January 27, 2010, at 9:47 PM, kengzeng wrote:

  If the article is right, does that mean there is still long way to go to get full recover. My god.....

• Report this Comment On January 28, 2010, at 3:06 AM, ET69 wrote:

  To Kengzeng--You ain't seen nothing yet!

  To xetn-- If the gov. hadn't intervened massively we would have already had a capitalist world wide collapse. Be careful what you wish for !

  To marktreat: Do you really think we are still a 'republic' circa 19th century? I think Empire is a more apt nomenclature.

  To truthisn'tstupid: Nobel intentions but $8.85 an hour is pretty much a definition of poverty in this country. Something tells me you are single without children and that you don't have to pay for health insurance but good luck anyway.

  To Goalie37-- your 'ray of hope' has as much chance as a Hail Mary in a football game.

  My crystal ball says if the economy doesn't turn up by next September--we are toast--all bets are off--anything could happen--depression- war - revoulution---take your pick.

• Report this Comment On January 28, 2010, at 9:17 PM, ISeeThemNow wrote:

  @xetn: All your posts are level-headed and very well informed. You should think about posting on other sights to spread your wisdom.

  @ET69: Very few people are aware that there was an economic depression in 1920, and that America came out of it in only one year with solid consistent growth. The reason: govt immediately responded by cutting the govt expenses and removing corporate and capital gains tax to encourage investing. Unlike now where govt has spent us into oblivion and also printed massive amounts of money, which is not good for anyone except the central banks.

• Report this Comment On February 10, 2010, at 3:35 PM, Classof1964 wrote:

  One reason the economy is in trouble is that the real purchasing power of 80% of the population did not benefit from the economic growth from 1981-2000 or from the Reagan and Bush tax cuts. If you have an economy that is nearly 70% dependent on consumer purchasing power, the consumers have to have real purchasing power. For most of the last three decades when real wages were not going up, consumers increasingly borrowed (as did businesses and governments). Such demand is ultimately unsustainable as we may finally see. So "Truthisntstupid" has a valid point of living within his means. We currently have some of the lowest taxes we have had in decades, which is part of the reason why the federal deficit has been growing since the Bush administration. The mantra of no new taxes is unsustainable given the retirement of the Baby Boom generation, the fact that Congress has spent all the Social Security income for decades, and the sky rocketing cost of medicare and medicine. The government did not spend us into oblivion; two unfunded wars, elimination of the pay as you go rule for Congress since 2000, and tax cuts, 75% of which went to the top income brackets, out of control medical costs, and the ability to borrow has led us to this precipice.

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