Although this article in Yahoo! Finance somehow puts a negative spin on it, the unexpectedly large economic growth April-June is nothing but good news.
The United States needs as much economic strength as it can muster to weather the U.S. banking industry train wreck… slow motion train wreck.
Gross domestic product, or GDP, grew at a 3.3 percent annual rate in the April-June quarter, its fastest pace in nearly a year, the Commerce Department reported Thursday. The revised reading was much better than the government’s initial estimate of a 1.9 percent pace and exceeded economists’ expectations for a 2.7 percent growth rate.
{ 4 comments… read them below or add one }
ks 08.30.08 at 10:43 pm
I think you just put a negative spin on the GDP numbers:
“The United States needs as much economic strength as it can muster to weather the U.S. banking industry train wreck… slow motion train wreck.”
The problem with the GDP numbers have to do with reality. The GDP number is used by people to judge the strength of the US economy. However, the recent GDP number (an estimate to be fixed at a later date) does not feel right to many people. The GDP estimate seems high for an economy going through the “train wreck” we are currently in.
At the end of the day, you can have a large increase in GDP and yet, if there is no increase in the income of the average american family, the GDP numbers mean zero to home sales. Absolute ZERO.
Peter Fork 08.31.08 at 5:55 am
Almost all the U.S. growth in the past 7 years has been achieved by borrowing on the international market (mortgages and government deficits). The “surprising” growth in the second quarter is made of the same material: government printing money. The Bush years were a complete economic fiasco, the biggest fraud of the last 60 years.
I think it was easy to see it coming. When you spend more than you earn for 7 years, what normally happens to your family?
Brian McMorris 09.01.08 at 10:38 am
Peter, you are partially right. My less cynical look at the data from the GDP report show that the bulk of the GDP gain comes from a 13.2% increase in Exports over the same quarter, 2007. This is not a bad thing, and is not some government fabrication, directly. But it was made possible due to the weak dollar, which might be said to be a government fabrication, though we really don’t know that either.
There was also the large benefit of the rebate program that bolstered consumer spending. But that is at the expense of the deficit, so while people actually did get to spend those dollars, it is by borrowing from the future. But didn’t Congress get behind this program? Or does the Executive branch now have the power to hand out money whenever it wants?
I really don’t buy the idea that “the Bush years were … the biggest fraud of the last 60 years.” That statement really needs to be backed up with some evidence and fact to be taken seriously. Too many people are just flipping around statements like that without any support.
How is that President Bush committed a fraud (if that is what is implied)? Poor judgement? Maybe. Poor Timing? Certainly.
Doesn’t Congress have a lot to say about Economic, Tax and Spending policy? Aren’t the Dems really behind the policy of Fannie and Freddie that leads them to support irresponsible lending? (the policy that home ownership is an American right)? Haven’t certain Republican’s tried to reduce the power of Fannie and Freddie in the past few years and increase accountability? How is the failure of Fannie and Freddie directly attributable to President Bush and his Cabinet?
Say it like it is, not how it sounds good for dramatic or political effect.
Peter Fork 09.01.08 at 1:24 pm
Brian,
Americans have been betrayed by their political and financial elites in the past years. This isn’t a Red/Blue debate. Both parties have caused the current mess. Note that I didn’t say “Bush”, but “the Bush years”.
Republicans had control of the Senate, the Congress, and the White House until 2006, so it is normal that somebody attribute them most of what is happening. It also happens that from 2001 to 2006, anybody who criticized their decisions was “anti-American”. This includes Reps and Dems who asked questions about the deficit, the invasion of Iraq, Fannie and Freddie, etc.
Meanwhile, friends of those in power were making loads of money, on Wall Street, in the Oil and Defense industries, etc. Draw you own conclusions.
An interesting read on the “Fannie Mae gang”:
http://online.wsj.com/public/article/SB121677050160675397.html