Friday, July 29, 2011
How's that Trillion Dollar Stimulus Working For You?
Uh...not so much. In what is sure to be overshadowed by the ongoing wrangling with the debt ceiling issue comes news that the economy has more or less ground to a halt.
Released today were the Commerce Department figures on 2011 Q2 and revised Q1 GDP statistics. Somehow what had originally been stated as a rate of 1.9% growth in Q1 (a slow but at least improving rate of growth) was massively revised downward to only a rate of 0.4%. How they got the figure that wrong in the first place is astonishing and indicates that the economy effectively stopped in the early part of 2011--thus the backsliding jobs picture found during Q2.
The results for Q2 (initially at least, who knows how they will be "revised" at a later date) reflect only a rate of 1.3% growth which is substantially below the 1.6% growth that had been predicted and is no where near the 3%+ rate needed to bring down unemployment, get the housing market back on its feet and government coffers filling with tax revenues.
Current predictions for a Q3 and Q4 growth rate of 3.2% are so massively overinflated it isn't even funny. We're 1/6 into the 2nd half of '11 already and with the debt ceiling issues and numerous large layoff announcements the US economy will be extremely lucky to see a single quarter in '11 with growth over 2% and I would bet on sub 2% growth in both Q3 and Q4 with continued basic unemployment rates of over 9%. Of course the response to this will be--"Just imagine how bad things would be if we HADN'T confiscated a trillion dollars of your hard earned money for redistribution!"