What's the Economy's Big Problem? In a Word: Washington

CNBC ^ | Fri. April 26, 2013 | John W. Schoen

[Comrade Brother Abu Bubba]

Washington's efforts to balance the budget are holding back the wobbly economic recovery.

After "fiscal cliff" fears brought the economy to a near standstill late last year, many forecasters had expected growth to come roaring back in the first quarter as consumers made up delayed spending and businesses filled deferred job openings and restocked depleted inventories.

But the Commerce Department's latest read on growth Friday showed U.S. gross domestic product expanding by 2.5 percent in the first three months of the year, less than the 3.1 percent pace forecasters had expected.

Analysts say deficit-cutting moves, including a 2 percent payroll tax hike that kicked in Jan. 1 and the ongoing the federal budget cutting known as sequestration, are beginning to take a bite out of growth. That's expected to continue later this year.

"The economy continues at a brisk walk at best," said Joel Naroff, chief economist at Naroff Economic Advisors. "With the tax hikes reducing disposable income and sequestration restraining federal spending, don't expect strong economic growth anytime soon."

"Whatever your view is on government spending, it's going to be a headwind for growth," said Ralph Schlosstein, CEO of Evercore Partners.

The weakness appeared to worsen late in the quarter, with a much slower-than-expected performance by the job market last month. After averaging more than 200,000 jobs a month in January and February, the pace of job creation fell to 88,000 in March. More recent data have pointed to marked slowdown in retail sales, industrial production and orders for durable goods

[Comrade Brother Abu Bubba]

Government isn't the solution, GOVERNMENT is the problem.
Ronald Wilson Reagan

[Ouderkirk]

the problem isn’t all Washington....it’s 0bama

[SpaceBar]

The biological analogy works best. DC is a mass of tissue, replicating and growing simply because it can, rerouting blood supplies to itself, and pushing up against healthy organs, resulting in the eventual death of the host. It’s such an important concept in medicine, they even have a special word for it.

[knarf]

The world over, it seems as long as history has been recorded, a few men have desired the whole world.

That desire is Satanic.

Until men reject Satan and receive Christ, ... call it what you will; politics, the economy, freedom, rights, etc., the few will always be able to harness enough power to control the many.

It just is.

What is Washington but a few, right ?

And the many are powerless to stop it.

[econjack]

Analysts say deficit-cutting moves, including a 2 percent payroll tax hike that kicked in Jan. 1 and the ongoing the federal budget cutting known as sequestration, are beginning to take a bite out of growth.

Bullcrap! The problem is uncertainty about taxes and expenses for business. If the gov't came out with a plan that said the gov't share of GNP would decrease from its current level to 15% of GNP, and that personal and corporate taxes would be dropped to 17% and 15% respectively, growth would explode, not shrink. Do you think it's by accident that the fastest growing economy in the world has the lowest corporate and personal income tax rates in the world? That same country has reduced the gov't share of GNP from almost a third to 5%. Shrinking gov't presence in markets would cause companies from around the world to flock to the US. So what's the fastest growing country these days--and directly attributable to a shrinking gov't? Chile. Look it up.

It's time to kick the freeloaders off the wagon. You don't have anything in the game, you don't play. You don't pay federal taxes, you don't get to vote. Sequestration has no measurable, correlated, impact on economic growth. This is just Washington being PO'ed because its power was decreased for lack of funds...period.

[BenLurkin]

bttt

[RetiredTexasVet]

Remember, they changed the way they compute GDP which added 2% automatically without any change in the economy. I think the change was announced in late December or early January. So if you subtract inflation from the real estimate of .5% you have a negative growth figure which is why they changed the calculation method. They knew it was coming and couldn’t have a replay of FDR.

[SunkenCiv]

Rand Paul calls on conservatives to embrace immigration reform
LATimes.com | March 19, 2013 | Michael A. Memoli
Posted on 04/21/2013 1:52:42 PM PDT by SoConPubbie
http://www.freerepublic.com/focus/news/3010596/posts

[SunkenCiv]

• ...by softening its edge on some volatile social issues and altering its image as the party always seemingly "eager to go to war... We do need to expand the party and grow the party and that does mean that we don't always all agree on every issue" ... the party needs to become more welcoming to individuals who disagree with basic Republican doctrine on emotional social issues such as gay marriage... "We're going to have to be a little hands off on some of these issues ... and get people into the party," Paul said. [Rand Paul: Time for GOP to soften [immigration, gay marriage] stance]

  ---

• One day after announcing on his radio show that he is "truly considering" running in 2014 for the U.S. Senate seat now held by New Jersey's Frank Lautenberg, Rivera amped up his message today in a television interview and a column on the Fox News Latino website... a moderate Republican who is fiscally conservative but also supports gay marriage and Roe v. Wade... [Geraldo Rivera declares himself a 'moderate Republican' as he eyes U.S. Senate run]

  ---

[MV=PY]

Well stated!

I think the solution is simple (stability so investors have the confidence to bet) yet very difficult (pols can’t help but meddle to buy votes).

[Tzimisce]

Politicians can (rightfully) smile and say the people are getting what they voted for.

[Chode]

"Business? In this business, you're always one step away from bankruptcy. Funny money, credit, speculation...
"Somewhere in this country there's a little old lady with seventy-nine dollars and twenty-five cents.
And the five cents is a Buffalo nickel...
"If she cashes in her investment, the whole thing'll collapse -- General Motors, the Pentagon, the DuPont Sisters and the whole shebang...
"We're all runnin' downhill. Gotta keep runnin' faster all the time or it'll all fall down..."

— the late character actor, Dub Taylor, as disgruntled gas station operator in 1974 film, Thunderbolt and Lightfoot

[marktwain]

Bullcrap! The problem is uncertainty about taxes and expenses for business.

Bingo! You hit it on the head! It is much like the depression, when the uncertainty kept the depression going until Roosevelt's heart stopped beating!