This Quarter's Pathetic GDP Numbers Are Making Obama Wince...
This week, we got more confirmation of what we already knew.... The economy is grinding to a halt. The Commerce Department gave it's quarterly estimates for Gross Domestic Product (GDP). It basically is a value of all goods and services produced in the United States - and it grew at an annual rate of a meager 1.5%... Clearly, Americans aren't getting out of this weak economy.
Like we often say, all of these things are related, and neither camp seems to grasp HOW to fix an economic downturn. Republicans think priming the pump from the top down 'job creators' start recovery. Meanwhile, Democrats are more correct that middle class consumption is what fuels growth - but they falsely think that government spending is what will kickstart it. Add to that the BS claim that continuing the Bush Tax Cuts for 98% of Americans is a TAX CUT! Wrong - not raising taxes is not the same as cutting taxes. It's doing nothing. Only in DC can you say you did nothing, and claim you did something positive...
Again, the slowing GDP is a sure sign that job creation will soon fizzle out to almost nothing, and certainly not enough to sustain a recovery. We need to create 125,000 jobs a month to keep up with population growth. That correlates generally to a 3.0% growth in GDP. Common sense would dictate then that we could expect the upcoming job creation numbers to continue in the 60,000 per month range. In short, there are less resources and jobs available for more people - and that translates into either a rise in the unemployment rate, or a continuation of jobseekers leaving the market. In any scenario, it's not good - unless you're Mitt Romney.
Though the electoral map hasn't shown it yet, another three months of this bad news cannot be good for Barack Obama in November. If he wants to create a long-term recovery, he needs to create a long-term tax plan that business can read and react to. Right now, it's a quagmire, like a bowl of pea soup.. Some businesses would hire, but there is no clear plan from DC. Without it, American Business will stand pat until all the mess of 2013 plays out, and they can see what the landscape with Taxmageddon and Obamacare is like. That means we are in for a stalled economy until at least 2014. It's going to be a long year and a half...
.
1 comment:
Mike, you're off on the number of jobs needed to continue growth. It's 150k not 125k. At this point that's a huge difference. The anti-business rhetoric coming from the progressive side of the democrats is what's fueling the downturn. Business simply is ready for another 4 years of this insanity.
I simply don't see this being close when it comes time for people to vote. It's going to come down to do I want a job or do I want to follow a following? Most people are going to vote for a job.
Post a Comment