It’s Friday, and We’ve Recovered!
The newest report from the MSN is a dandy… “The U.S. is growing at a 5.7% pace, faster than at any time since 2003!” Yep, faster than 2006 when the housing boom was literally on fire. Thank goodness, for a minute there I thought we were in trouble.
“Wow, great number. It’s very solid and gives us a running start into the second half of the year when we can’t rely on government stimulus,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
“That’s part of the plan, to get us moving as fast as possible so when life support is removed we’ll have a pulse.”
Oh, so that’s where the good numbers come from; life support in the way of government spending. And since the government has no money, that spending came in the form of good old fashioned debt. But don’t worry; we’ll grow out of debt, like we grow out of our pants when we’re on vacation.
Some of that life support spending is coming to Florida, because that state is one of the worst hurt by the recession. So ya see, poor behavior really is rewarded first.
Florida was awarded $8 BILLION of stimulus money to build a high speed rail system. This will let the folks in South Florida travel north faster when the next hurricane comes. What? You thought they were going to jobs? Come on, this is a serious article, there are no jobs in Florida.
I’m holdin’ to my guns here people, we are short term thinkers dealing with a very long term problem. And, since I’m sure you’re tired of hearing my spiel, how about a little different angle from Richard D’Aveni, a professor of strategic management at Dartmouth’s Tuck School?
In his 1934 booklet, The Chief Cause of This and Other Depressions, Leonard P. Ayres stated, “The fact that it is extremely difficult to induce a business recovery by [government] increasing the purchasing power of the individual consumers, is being impressively demonstrated in this depression.”
What Mr. Ayres explained was that simply giving people money to spend (stimulus) without a real job to earn it; is futile. Who would have ever thought it?
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Mike…
Link does not work for me..
wma..
Mike..
I agree.. I believe, mostly they are trying/hoping that if some people believe that recovery is happening, Humpty Dumpty will be put back together again, and we an step back one little bitty half step from the brink, and just ride there until ??
Does it have a chance of success.?? I dunno.. I suppose if people believe in miracles, it cud happen..
Here’s a quote from cnbc web page..
“Double US Exports in 5 Years? Obama Goal Would Be ‘Miracle”.. (CNBC)
I guess, we are supposed to believe in miracles..??
Good luck.. wma…
Mike…
I note that the nation of Greece is in financial trouble.. I am not surprised..
Here is what one author had to say about it..
“One, the EU is angry with Greece NOT because its economy has slumped into a huge 12.7 percent budget deficit, but because it did so with stats that no one realized until recently were completely unreliable.”
I note the bit about “unreliable statistics”.. I also note, that “no one realized” it.. Isn’t that remarkable.. (and also unbelievable.??)
Note, the CPI has shown no inflation, and so, no cost of living adjustment.. We can certainly adjust the statistics, so we don’t have to increase Social Security payments.. And, again, nobody has realized it..
tnx. wma…
Wma,
Sorry about the link, the shortcut didn’t work so i posted the entire address. I encourage everyone to view the link, it makes all the common sense in the world.
The Greece thing is more evidence regarding hard limits. Europe has been spawned out for years. Germany and France are huge exporters, left to their own physical wealth and consumption, they’re toast, just like Japan.
The talk about things improving isn’t news, it is propaganda. However, the problem gets really serious when the propagandists and leaders start believing the lies they are telling others.
In addition to the propagandists, there are the true believers who don’t know any better. People like the Mayor or Las Vegas who claimed he didn’t see the financial crisis coming to their city. The former head of FEMA and his inability to comprehend the scale of destruction with Katrina, the list goes on.
There is an old joke about a document that was circulating around the Pentagon. It was a Top Secret document, but most people who read it thought it was total nonsense. Finally, some joker ammended the cover which was stamped “TOP SECRET: FOR INTERNAL USE ONLY”, by scribbling in the qualifier “However, harmful or fatal if swallowed.”
This disclaimer should accompany any government or corporate “news release” that is disseminated to the media.
Here’s another take on the numbers and it tells a different story. Also, note that 5.7% increase in GDP is an ANNUALIZED rate. The actual rate, if you can trust the numbers, is 1.425%
To me the story is that 2009 was the worst year for GDP since 1946! Look at the long-term trend since 2006. One quarter does not constitute a trend, it is wishful thinking.
http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=USD
This chart can be modified to go back further and it is even more telling.
So what’s the mathematical relationship between the so called 5.7% jump in GDP and the additional Trillions in National Debt? I saw an interesting report on CNN an $80 Million Stimulus Project to bring High Speed Internet to a remote village in Alaska. The project would create 80 Jobs!!! If I double check my 8th grade math skills I do believe that it’s taking $1 Million to create 1 job in Alaska. It seems to me it would be more cost effective for the Government to keep those 80 people on Unemployment Insurance.
Totally unrelated to today’s topic but relevant to our discussions on self-reliance and being prepared. ‘After Armageddon’ is on the History Chanel tomorrow night. It’s well worth the 2 hours to watch if you haven’t seen it.
http://www.history.com/shows.do?episodeId=524638&action=detail
Thanks for the comments and yes the numbers are totally bogus. The first question should be, “Growing from what?”
I have a friend who is a small manufacturer and who called me after seeing Obama promise loans for small business and tax breaks for employing new people. My friend asked, “Borrow money for what? Employ people for what?”
American’s are broke, when is that news going to reach Washington? Our small manufacturers can’t compete with poverty stricken nations. That’s why Americans are broke. When does it sink in? It just ain’t that difficult to understand.
Greg, The GDP chart is very telling. I’m sticking with my guns, U.S. GDP has reached zenith when corrected for inflation and presented as a per-capita number.
Note that the chart does not include those qualifiers or the numbers would be staggering.
If you invite four people over for a one chicken dinner and eight show up, adding one wing won’t get it!
Strong arguments can be made that the CPI (Consumer Price Index), inflation, is not accurate. Many people believe that with it’s “adjustments” a couple years ago, it’s low. When this depression started, the u.s. GDP growth was still growing for some time.. This pretty much exposed the inaccuracy of the CPI estimates..
If the inflation estimates are low, then the GDP estimates are high.. This should always be considered when the propagandist talk about growth..
tnx.. wma…