Economic dependency is a far more insidious form of slavery than shackles and chains. One merely enslaves the body, the other enslaves the soul. Wonder when the low-information Obama voters are going to figure it out? 
Posted on 02/08/2014 10:19:55 AM PST by 1rudeboy
The new Bureau of Economic Analysis (BEA) report measuring how fast the economy grew in the fourth quarter of 2013 and for the entire year of 2013 confirms that while the U.S. economy has clearly picked up steam, it is still in the grip of a subpar recovery from the recession that ended in 2009.
The cost of this slack-paced expansion—compared to past recoveries—has been $1.3 trillion in gross domestic product (GDP), according to the Joint Economic Committee.[1] In other words, the U.S. economy would be generating about $1.3 trillion more in output and income to American workers and businesses if recent policy mistakes had not prevented an even average recovery. This growth deficit is a major reason opportunity remains stagnant and talk of income inequality is growing.
The good news from the BEA report is that growth for the second half of 2013 was 3.5 percent and private-sector growth, which is what matters, was closer to 4 percent.[2] That is hardly warp speed, but it feels like taking a lap in a race car on the Indy 500 track compared to the slow-motion growth rate since the recession officially ended.
Over the full year of 2013, however, the economy grew at an anemic 1.9 percent. That is an alarmingly slow rate of expansion this far into the recovery, especially considering the economy has never had a breakout year of exceptional growth since the recession ended. Growth during the recovery has averaged 2.3 percent annually compared to over 4 percent during the average post–World War II recovery.[3]
Growth in the fourth quarter indicates that a pickup in the economy to a more normal rate of expansion might not be on the horizon as many had hoped. In that period the economy slid to 3.2 percent growth from 4.1 percent in the third quarter. While the economy did pick up steam in the second half of 2013 compared to the first half of the year, the fourth quarter deceleration is worrisome.
Adding to the concern about the fourth quarter slowdown is a recent spate of other weak economic indicators. The stock market has shed more than 7 percent since mid-January this year, car sales were weak in January,[4] and the manufacturing outlook deteriorated in January compared to December.[5]
The monthly jobs report for January comes out tomorrow and will add another data point indicating whether the economy is slowing down or continuing the momentum it built at the end of 2013.
Some argue that decreases in government spending were a contributor to soft growth in 2013.[6] They have the story backward. Government spending has fallen over the past six months even as the private economy shifted into a faster gear. The reduction in spending facilitated the pickup rather than inhibiting it.
Money the government did not spend is resources it did not take out of the private sector either through taxing or borrowing. The private sector either spent those resources in 2013, boosting other sectors of the economy, or will spend them going forward which will result in stronger growth then. Either way the economy does not suffer when the government spends less.
The current recovery looks to be particularly troubling compared to what happened following the last severe recession from July 1981 to November 1982. In 1986, the fourth full year of the recovery from that recession, the economy grew 3.5 percent—almost twice as fast as in 2013, the fourth full year after the recent recession ended.
The much bigger disappointment is the failure of this expansion to experience a breakout period of growth. At this stage of the post-1982 expansion, the economy averaged 4.9 percent annual growth, with seven quarters exceeding 5 percent. In 1984, growth sprinted forward at a 7.3 percent clip, while the fastest growth rate for the current recovery has been 2.8 percent in 2012.
During the first four years of the post-1982 recovery, the economy created 11.6 million jobs. The current recovery has created just over 6 million.[7]
The stark difference between these recoveries raises the question: What is different this time that is preventing the economy from growing faster? The answer is that persistent policy failures emanating from Washington are causing the economy to fall short of expectations for four years and running.
The litany of policy abuses is long and includes:
Troublingly, this list is not exhaustive. These mistakes have all contributed to a ratcheting down of growth and help explain why so many Americans believe that the recession has never really ended.
The policy failures all have one thing in common: They enlarged the size of the federal government and its role in the economy and lives of the American people.
Contrasted with the approach followed by President Reagan and Congress following the 1982 recession, the approaches could not be more different. President Reagan and Congress enacted a pro-growth agenda that cut taxes and reduced the reach of government. The wide disparity between growth during the ensuing recovery then and the current recovery speaks volumes about which approach is better for the economy.
Hopefully, 2014 will be that year of breakout growth for the recovery that the economy so desperately needs and Americans lacking opportunity crave. The case for optimism is twofold. American businesses are in strong financial shape on balance, with large cash surpluses and bullish profits, as reflected in the rapid stock market run-up in 2013. And there is a small likelihood of Washington enacting any new anti-growth legislation this year such as more stimulus spending, a cap-and-trade regime to regulate carbon emissions, and more harmful tax increases.
The gridlock in Washington now is mostly a plus for the economy. The new GDP report confirms that in Washington these days, less is more.
[1]Joint Economic Committee, “Recovery’s Growth Gap Remains Large,” http://www.jec.senate.gov/republicans/public/?a=Files.Serve&File_id=357eb391-3bf4-4d0e-95a6-8a938e739c0f (accessed January 31, 2014).
[2]U.S. Department of Commerce, Bureau of Economic Analysis, “Gross Domestic Product: Fourth Quarter and Annual 2013 (Advance Estimate),” January 30, 2014, http://bea.gov/newsreleases/national/gdp/2014/pdf/gdp4q13_adv.pdf (accessed January 31, 2014).
[3]U.S. Department of Commerce, Bureau of Economic Analysis, “National Income and Product Accounts Tables,” Table 1.1.1, http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=1&isuri=1 (accessed January 27, 2014).
[4]Same Ro, “Auto Sales Missed Big in January,” Business Insider, February 3, 2014, http://www.businessinsider.com/january-us-auto-sales-2014-2 (accessed February 4, 2014).
[5]Press release, “January 2014 Manufacturing ISM Report On Business: PMI at 51.3%,” Institute for Supply Management, February 3, 2014, http://www.ism.ws/ismreport/mfgrob.cfm (accessed February 4, 2014).
[6]Jason Furman, “Advance Estimate of GDP for the Fourth Quarter of 2013,” The White House, January 30, 2014, http://www.whitehouse.gov/blog/2014/01/30/advance-estimate-gdp-fourth-quarter-2013 (accessed February 4, 2014).
[7]U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey, household data, employment status of the civilian population by sex and age, seasonally adjusted, http://www.bls.gov/webapps/legacy/cpsatab1.htm (accessed January 31, 2014).
[8]U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2014, Table 7.1, p. 143, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/hist.pdf (accessed January 31, 2014).
[9]James L. Gattuso and Diane Katz, “Red Tape Rising: Regulation in Obama’s First Term,” Heritage Foundation Backgrounder No. 2793, May 1, 2013, http://www.heritage.org/research/reports/2013/05/red-tape-rising-regulation-in-obamas-first-term.
And the employment situation will not get better until Barack Obama is out of the White House. Whether that comes from waiting for 1/21/2017, or he resigns, or he is impeached, the American worker will not see opportunity until Obama is gone. And even then it depends on which clown takes over from Barry.
You can’t have sustainable and mass spending at the same time but this regime is clueless in all business issues.
Economic dependency is a far more insidious form of slavery than shackles and chains. One merely enslaves the body, the other enslaves the soul. Wonder when the low-information Obama voters are going to figure it out?
Bump.
Horse Hockey.
Theses clueless ,insulated DC wonks ought to get out on “the street” in Everytown USA and witness the 21st century Depression with the endless stretches of boarded-up businesses in progress.
Total detachment from reality.
Let me know when you read past the headline. /s
There is no improvement in the economy over all. It is all a lie.
I believe it is called the “farmer’s fallacy,” although I don’t know if it is a term-of-art, or just something I read on some other blog. “There is a drought here, so there must be a drought everywhere.” Don’t fall for it.
That works the opposite way as well. It is so great here so it must be great everywhere. The numbers are provably rigged. Those having jobs as a percentage of the working population is decreasing. discretionary spending money is tanking due to large increases in the cost of living. Obamacare also. Stores are doing poorly. (WalMart, Radoshack, JC Penny, K-mart, Sears to name a few) The only thing holding it up is the pulling forward of demand by out of control deficit spending which will come back to destroy us. And a million just lost EUC, but they don’t count as unemployed. You should be careful that you are not fooled.
Ok, so you don't know what you're talking about, as I suspected.
So you know more than say “business Insider”.
http://www.businessinsider.com/expiring-euc-unemployment-rate-drop-2013-12
I actually knew that it was 1.3 million, but I was trying to be nice. You see Denninger posts the charts every time it is updated. In one week it went from EUC 1.3 million to EUC 0. Now the government took the EUC line right out of the table.
Try DU...They like misinformation. And they like telling people who look at the facts that they don’t know what they are talking about. If you have to lie to make you case then please do it somewhere else.
Bump for later.
If you read it carefully (snort), you'll note that when they lose their unemployment compensation, some people stop looking for work, and some continue to look for work. The first group does not count in the calculation, and the second group does. I really can't spell it out any simpler. I'd link to a section of the BLS website that explains it, but it uses really big words. And if you can't understand Business Insider . . . .
Regarding the vaunted +113,000 jobs ‘created’, you might enjoy:
http://www.freerepublic.com/focus/news/3120752/posts?page=22#22
As far as the government is concerned none of them are looking for work. If they are not looking for work then we can count them as not unemployed. Yeah that is reasoning that only the left could come up with.
And come on. Just how does the government know overall who is really looking for work or not? The only thing they have is if you are on some form of unemployment. Once you drop off from that and stop reporting then they know nothing.
Yep... They have so many ways to rig the numbers. And if all else fails they will just make them up.
Simple question to answer, and most likely the source of your confusion. The government calls 60,000 households (I believe that's the number) and asks, are you unemployed and looking for work? Unemployment compensation, or lack thereof, does not factor.
Another source of your confusion might be that the government does keep track of initial, and continuing, unemployment claims for benefits. But these do not have anything to do with the above.
And again, false.
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