Tag: Economy
GDP shrinks to 3.8 percent, signaling bad economic conditions
This is not good at all.
The United States economy shrank at its fastest pace in a quarter century from October through December, the government reported on Friday, as consumer spending and business investment collapsed, signaling more economic contraction in the months ahead.
In the broadest official accounting of the toll of the credit crisis, the government reported that gross domestic product shrank at an annual rate of 3.8 percent in the fourth quarter of 2008. While that was less than economists’ expectations of a 5.5 percent drop, the decline would have been much steeper — more than 5 percent — if shipments of goods had fallen as sharply as orders.
President Obama seized on the figures Friday morning, calling the contraction a “continuing disaster” for working families, and again urged Congress to pass a package of tax cuts and spending. The House, divided on party lines, passed an $819 billion stimulus plan on Wednesday, and Senate is expected to take up the measure next week.
“What we can’t do is drag our feet or delay much longer,” Mr. Obama said. “The American people expect us to act.”
The president also announced the creation of a Task Force on Middle-Class Working Families, which will seek to raise living standards of working families. It will be led by Vice President Biden.
Wall Street tumbled after the numbers were released, with the Dow Jones industrial average falling more than 100 points in midday trading. The broader Standard & Poor’s 500-stock index was down 1.5 percent.
The slide in gross domestic product — a crucial measure of economic health — is likely to continue at an alarming pace well into the summer as consumers continue to curtail spending and businesses reduce their capital investments and cut their payrolls, economists said.
In the fourth quarter, rising inventories accounted for the difference between the overall 3.8 percent contraction of the economy and a steeper 5.1 decline in final domestic sales.
“The difference between 3.8 and 5.1 percent is the inventory buildup,” Nigel Gault, chief United States economist at IHS Global Insight, said. “My only explanation is that companies could not cut production fast enough.”
With inventory accumulation gone, the economy will contract in the first quarter at more than a 5 percent annual rate, Mr. Gault said.
Employers reduced their corporate investments in computers, office equipment, machinery and other capital goods by an annualized 19.1 percent in the fourth quarter.
Trade fell, as Americans bought fewer Asian-made televisions and computers, and global demand for American goods and services ebbed. Exports in the fourth quarter declined 19.7 percent while imports dropped 15.7 percent.
Josh Bivens, an economist at the Economic Policy Institute said that the drop in exports was distressing because of their contribution to growth in recent years.
“That’s been a real key strength to the economy,” Mr. Bevins said. “They were punching above their weight for a couple of years, but they have really collapsed.”
And American consumers, who took on home equity loans and large amounts of credit card debt to finance their lifestyles earlier in the decade, curtailed their spending for a second consecutive quarter. Consumer spending, which typically accounts for two-thirds of economic growth, fell 3.5 percent in the quarter, after decreasing 3.8 percent in the third quarter.
With no end in sight to the downturn, the stark numbers on Friday are likely to intensify the debate over an enormous stimulus plan moving through Congress.
Christina D. Romer, chairwoman of President Obama’s Council of Economic Advisers, said the report offered more evidence that the economy continued to contract severely, and said “immediate action” was needed to shore up the financial sector and broader demand.
“Aggressive, well-designed fiscal stimulus is critical to reversing this severe decline and putting the economy on the road to recovery and improved long-run growth,” Ms. Romer said Friday in a statement.
Michael E. Feroli, a United States economist at JPMorgan Chase, said, “The fact that you’re not seeing any evidence that things are turning for the better has added quite a bit to the urgency to get things done and do something substantial.”
via Pullback Less-Than-Expected in 4th Quarter – NYTimes.com.
The downward spiral continues, the fallout from the breaking of the bubble that existed during the Bush Administration. The Bubble that was created by the Clinton Administration. Instead of listening to Ron Paul, who did have the proper correction for this mess; instead were are attempting to throw money at the problem, this will end in disaster. Ron Paul spoke about this, in a video that I posted. He also spoke with the people on MSNBC’s Morning Joe, here’s that Video: (Via Jack Hunter)
Of course, the mental midgets on “Morning Joe”, just did not get it at all. 🙄
Welcome to the massive screwing of the American people folks! Your beloved leaders have failed you, and now, we all have to suffer. 😡
Why does America always do stupid things like this?
I will never, ever understand why America does stupid things like this right here, ever!
The Obama administration on Friday made an emergency contribution of more than $20 million for urgent relief efforts in the Gaza Strip, a day after the United Nations launched a flash appeal for $613 million to help Palestinians recover from Israel’s three-week military operation there.
The State Department said President Barack Obama had authorized the use of $20.3 million from the U.S. Emergency Refugee and Migration Assistance Fund for humanitarian assistance to the 1.4 million Palestinians in Gaza.
The money will go to U.N. agencies and the International Committee of the Red Cross, which are distributing emergency food assistance, providing medical care and temporary shelter, creating temporary employment and restoring access to electricity and potable water, the department said in a statement.
The Israeli offensive killed nearly 1,300 Palestinians, including hundreds of civilians, and caused an estimated $2 billion in damage, Palestinian officials say. The assault was launched to halt years of Hamas rocket fire on southern Israel.
You want to know where this money is going to end up? In the hands of Hamas, the very terrorist organization that was attacking Israel, in the first place. This money is supposed to be reserved for American Citizens, not for foreign countries! You know, I find it absolutely amazing that the United States of America, would support a military attack on Gaza by Israel to defeat terrorists; only to have them send aid to the very people that Israel attacked. Not only this, our government is using money that is specifically earmarked for the people of the United States of America. This is an outrage! Someone should be complaining to the high Heavens about it!
The reason this outrages me so much is this; yeah, that money might go to American agencies approved by our Government, but ultimately, it will end up right back into the hands of the Hamas terrorists.
I will never understand why America continues to prop up those they claim are terrorists.
Ron Paul once again, speaks the truth.
This comes via LewRockwell.com Blog.
Ron Paul just telling it like it is. People call him a kook, but, you know what? He’s absolutely right.
You want to know why the Neo-Conservatives hate this man so much? Because he exposes them for the fascist, Anti-American scum that they are.
Technorati Tags: Bailouts ,economics ,Economy ,Lew Rockwell ,Libertarian ,Opinion ,Neo-Conservatives ,Paleo-Conservatives ,Politics ,Republicans ,Ron Paul
A damned good read!
This is awesome, go give it a read:
Despite such sentiments among many economists, the stimulus plan is certain to be passed by Congress and signed by President Obama.
Which means the last chance to head off “stimulus” boondoggle is to make sure the money isn’t there to be spent. And since our debt-ridden government has no money of its own to flush away, and will have to borrow the cash, scaring off potential lenders is the best bet.
So, come on America. Say it in print, on the radio, on TV, on blogs and in advertisements. Say it loud and say it proud: If the world is dumb enough to loan more money to the U.S. government, don’t expect it to be paid back. The Americans who will be making decisions in the decades to come won’t be bound by the folly of the current crop of office-holders.
If enough of us say it, the world will listen, and cut off the tap.
If that doesn’t stop the spending spree, nothing will.
via Disloyal Opposition: Screw the stimulus — let’s scare off the lenders.
I could not have said it better myself. 😀
House Passes Democrat Liberal Moonbat's $819 Billion Economic Stimulus Plan
I’m very glad to see the the Loyal Opposition doing it’s job, for a change!
With no Republican support, the House approved an $819 billion stimulus plan that will serve as the cornerstone of President Obama’s efforts to resuscitate the economy, an early victory for the new president but still a disappointment because of the lack of Republican votes.
The measure passed 244 to 188, with 11 Democrats and 177 Republicans voting against it.
The two-year economic package includes $275 billion in tax cuts and more than $550 billion in domestic spending on roads and bridges, alternative-energy development, health-care technology, unemployment assistance, and aid to states and local governments. It would also provide up to $500 per year in tax relief for most workers and more than $300 billion in aid to states for funding to help rebuild schools, provide health-care to the poor and reconstruct highways and bridges.
via House Passes $819 Billion Economic Stimulus – washingtonpost.com.
For the Video, Go Here, Embedded videos won’t load, from WaPo, Liberal Programmers are such idiots.
I guess President Obama was not able to convince the Republicans to get in line. So much for that Obama and Change line. I’m all for helping economy, but this damn thing is nothing more than a big waste. I mean, what in this is going to put ME back to work? None of it! I mean, because we all know that all the contracts for the road work is going to go to all MINORITY workers. Seeing the Democrats want to avoid the “White Construction workers“.
So, yeah, like Michelle said, this is all your crap sandwich Communist Liberals; YOU CAN EAT IT!
What idiots, we got an empty suit communist running the White House and communists running the damn Congress and Senate. McCarthy would be rolling over in his grave. 🙄
Good luck with that!
The DC Examiner challenges President Obama:
“After a relentless expansion of big government for decades under both Republican and Democratic administrations, the nation’s economy is finally buckling under the load. In his inauguration address, President Barack Obama blamed “greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age.” But Obama’s $825 billion stimulus plan contains few “hard choices”- just lots more government spending.
“The hardest choice off all is to scale back government at the local, state and federal levels and stop the seemingly inexorable growth of entitlement programs that are bankrupting the nation. But is the Obama administration up to this kind of real change?”
I hate to say it, but it’s just not going to happen.
Welcome to the new nationalized USA!
(Via the Libertarian Party Blog) (H/T IPR Blog)
From the "Awesomeness" Stack
Earlier today, I received a tweet from John Hawkings over at Right Wing News. Which pointed to a posting over on his Blog. John Hawkings also runs the Conservative Ads over on BlogAds; which you can get great ad prices over there, might want to check that out.
Anyhow, there was this e-mail that John was talking about, that I guess he saw over at DailyKos, that was attributed a Michael Crowley , however Mr. Crowley says he did not write it, but just the same, the posting is quite awesome.
Check it out:
Family Planning money…..under the bus!
Obama finally capitulates.
WASHINGTON – House Democrats are likely to jettison family planning funds for the low-income from an $825 billion economic stimulus bill, officials said late Monday, following a personal appeal from President Barack Obama at a time the administration is courting Republican critics of the legislation.
Several officials said a final decision was expected on Tuesday, coinciding with Obama’s scheduled visit to the Capitol for separate meetings with House and Senate Republicans.
The provision has emerged as a point of contention among Republicans, who criticize it as an example of wasteful spending that would neither create jobs nor otherwise improve the economy.
Under the provision, states no longer would be required to obtain federal permission to offer family planning services — including contraceptives — under Medicaid, the health program for the low-income.
via Officials: Family planning money may be dropped – Yahoo! News.
I must say, I cannot criticize Obama for this one. Because I feel abortion is murder, I am glad to see that Obama is telling Democrats in Congress to dump this. This is one that I will give him credit for. The Economy can be recovered without paying for abortions or handing out condoms. I find it quite shocking that the Democrats would use a economic situation like this, to further a murderous agenda.Which furthers my belief that the Democratic Party has become the communist party and an Anti-Christian, Anti-Life party.
(Via Memeorandum)
The President's Weekly Video Address
Related: Download the Recovery Plan Metrics Report
Transcript: (Source: The White House)
Remarks of President Barack Obama
Weekly Address
Saturday, January 24th, 2009
We begin this year and this Administration in the midst of an unprecedented crisis that calls for unprecedented action. Just this week, we saw more people file for unemployment than at any time in the last twenty-six years, and experts agree that if nothing is done, the unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future.
In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse.
That is why I have proposed an American Recovery and Reinvestment Plan to immediately jumpstart job creation as well as long-term economic growth. I am pleased to say that both parties in Congress are already hard at work on this plan, and I hope to sign it into law in less than a month.
It’s a plan that will save or create three to four million jobs over the next few years, and one that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work even as, all around the country, there’s so much work to be done. That’s why this is not just a short-term program to boost employment. It’s one that will invest in our most important priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.
Today I’d like to talk specifically about the progress we expect to make in each of these areas.
To accelerate the creation of a clean energy economy, we will double our capacity to generate alternative sources of energy like wind, solar, and biofuels over the next three years. We’ll begin to build a new electricity grid that lay down more than 3,000 miles of transmission lines to convey this new energy from coast to coast. We’ll save taxpayers $2 billion a year by making 75% of federal buildings more energy efficient, and save the average working family $350 on their energy bills by weatherizing 2.5 million homes.
To lower health care cost, cut medical errors, and improve care, we’ll computerize the nation’s health record in five years, saving billions of dollars in health care costs and countless lives. And we’ll protect health insurance for more than 8 million Americans who are in danger of losing their coverage during this economic downturn.
To ensure our children can compete and succeed in this new economy, we’ll renovate and modernize 10,000 schools, building state-of-the-art classrooms, libraries, and labs to improve learning for over five million students. We’ll invest more in Pell Grants to make college affordable for seven million more students, provide a $2,500 college tax credit to four million students, and triple the number of fellowships in science to help spur the next generation of innovation.
Finally, we will rebuild and retrofit America to meet the demands of the 21st century. That means repairing and modernizing thousands of miles of America’s roadways and providing new mass transit options for millions of Americans. It means protecting America by securing 90 major ports and creating a better communications network for local law enforcement and public safety officials in the event of an emergency. And it means expanding broadband access to millions of Americans, so business can compete on a level-playing field, wherever they’re located.
I know that some are skeptical about the size and scale of this recovery plan. I understand that skepticism, which is why this recovery plan must and will include unprecedented measures that will allow the American people to hold my Administration accountable for these results. We won’t just throw money at our problems – we’ll invest in what works. Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made public, and informed by independent experts whenever possible. We’ll launch an unprecedented effort to root out waste, inefficiency, and unnecessary spending in our government, and every American will be able to see how and where we spend taxpayer dollars by going to a new website called recovery.gov.
No one policy or program will solve the challenges we face right now, nor will this crisis recede in a short period of time. But if we act now and act boldly; if we start rewarding hard work and responsibility once more; if we act as citizens and not partisans and begin again the work of remaking America, then I have faith that we will emerge from this trying time even stronger and more prosperous than we were before. Thanks for listening.
(H/T HotAir)
Others: New York Times, AmSpecBlog, Political Machine, AMERICAblog News, Political Punch, Gothamist and ONTD: Politics