When the US Department of Commerce released their sucky Gross Domestic Product Report numbers this morning — which show that our economy contracted slightly during the last quarter of 2012 — White House Press Secretary Jay Carney didn’t bother waiting for the GOP’s blame games to begin. Instead, he fired the first pot shot, and laid the blame on the Republican Congress’s doorstep where it belongs:
“Consumer confidence overall has been rising, and consumer spending has been rising, but there’s more work to do, and our economy is facing a major headwind … and that’s Republicans in Congress,”
“These arbitrary, automatic cuts were a creation and demand of the White House in 2011 … Twice the House has passed legislation to replace them with commonsense cuts and reforms. If there was any uncertainty late last year about the sequester, it was because the Democratic-controlled Senate, per usual, never lifted a finger to pass a plan to replace it.”
“The fourth-quarter retreat mostly stemmed from lower inventories and a plunge in military spending. Spikes in those two categories had given growth for the third quarter an exaggerated pop, and economists expected them to be reversed.
Superstorm Sandy and the year-end budget battle in Washington over the so-called fiscal cliff may have also hurt growth, economists say.”
But when you look at the big picture, the numbers prove that Boehner and the GOP’s economic policies are bad for economic growth, and dead WRONG. When our government cuts spending, our economy contracts, REGARDLESS of which programs get the axe. Our time in Iraq and Afghanistan has also proven beyond any doubt that — unlike domestic spending on roads, communications, education, and other infrastructure — spending money on unnecessary, unilateral wars around the world yields little return on investment and does little for our economy (unless you happen to own shares in Halliburton and Dubya’s other no-bid contractors).
Chad Stone, an economist with the Center on Budget and Policy Priorities also told the Huffington Post that:
“Austerity has been terrible for Britain and the rest of Europe. We’ve not been as bad as them, but we haven’t given our economy the support it needs.”
Zach Carter and Ryan (appropriately sur-named) Grim’s report also adds:
“In October, the International Monetary Fund issued a report concluding that global policymakers had dramatically underestimated the significance of government spending during a recession. As a result, lawmakers expecting modest drags from austerity instead saw their economies plunge back into a devastating recession. The United Kingdom, where unemployment now stands at 7.7 percent, has experienced a triple-dip recession. In Spain and Greece, unemployment is over 25 percent, with savage humanitarian consequences: HIV infections in Greece are up by over 1,500 percent since the austerity campaign began in 2010.”
Yet, some good news lurks amidst the bad. A 0.1% dip isn’t too terrible, considering what this country’s been through in recent years. Despite the GOP’s obstructionist and market-spooking modus operandi, the American people are an optimistic and resilient lot. Matthew Philips from Bloomberg Business Week believes that — despite the “22% decline in defense spending,” our economy is “primed to expand.” He adds:
“While businesses were cutting back on inventory spending, total business investment surged by 12.5 percent as companies spent on capital goods such as computers and trucks and machinery. That’s very good news, especially for a recently beleaguered manufacturing sector.”
Meanwhile, Neil Dutta, the lead U.S. economist of Renaissance Macro Research, told Bloomberg Business Week:
“Consumer spending rose at 2.2 percent and the savings rate increased to 4.7 percent, up more than 1 percentage point from 3.6 percent in the third quarter. When people have more money to spend and they save at the same time, that’s a very good sign. Real disposable income grew by 6.6 percent, more evidence that wages are starting to inch higher.”
Even Bartash from MarketWatch has some good news to report:
“Yet other aspects of the GDP report showed resilience, such as consumer spending, home building, and business investment in equipment and software. Increases in those areas suggest the underlying U.S. economy continues to grow at a moderate rate of around 2%.”
So, put THAT in your orange tanning bed and smoke it, Johnny B.
|Elisabeth Parker is a writer, Web designer, mom, political junkie, and dilettante. Come visit her at ElisabethParker.Com, “like” her on Facebook, or follow her on Twitter. For more articles by Elisabeth, click here.|