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Economy shrinks for first time in 3 1/2 years[W: 395]

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Not that results matter to the Obama cult but further signs that we are on the wrong path and that Obama doesn't have any interest in growing a private sector economy. The new normal today is high unemployment, high debt, massive dependence on the govt, and low economic growth. Congratulations to those of you who believe it is the role of the govt. to provide cradle to grave coverage funded by the rich.

US economy shrinks 0.1 percent, 1st time in 3 1/2 years | Fox News
 
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Re: Economy shrinks for first time in 3 1/2 years

Cutting spending OR raising taxes will cause recession, especially with the $1 trillion you guys need to balance. A minor recession is enevitable when balancing a deficit so large.
 
GDP Shows Surprise Drop for U.S. in Fourth Quarter

The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth...


The economy shrank from October through December for the first time since the recession ended...


The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.


The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts.

GDP Shows Surprise Drop for U.S. in Fourth Quarter
Why are the failures of Socialists always called a "surprise", or "unexpected"? Answer: Socialist propagandists masquerading as journalists cannot help themselves.

This is no "SURPRISE!" to anyone who has half a brain. It is EXPECTED. You cannot crap the gas tank of the engine full and expect it to run.

What will Obama's solution be? More government. Always and forever... more government. More socialism.

And the recession ended??? Only in the minds of the Socialist of Amerika Partei (SAPs) Kool-Aid gulpers.
 
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Re: Economy shrinks for first time in 3 1/2 years

Cutting spending OR raising taxes will cause recession, especially with the $1 trillion you guys need to balance. A minor recession is enevitable when balancing a deficit so large.

Wrong, cutting spending in a private sector economy will have limited effect. Unleash the private sector and force people like you to accept personal responsibility is the only way for this country to thrive. Only socialists believe we need a 3.8 trillion dollar and growing Federal Govt. and have no problem with high unemployment, high debt, and low economic growth, the new socialist normal. Welcome to Greece II and the Obama economy.
 
Re: Economy shrinks for first time in 3 1/2 years

Cutting spending OR raising taxes will cause recession, especially with the $1 trillion you guys need to balance. A minor recession is enevitable when balancing a deficit so large.

We didn't cut spending OR raise taxes in the 4th quarter of 2012.
 
Re: Economy shrinks for first time in 3 1/2 years

Wrong, cutting spending in a private sector economy will have limited effect. Unleash the private sector and force people like you to accept personal responsibility is the only way for this country to thrive. Only socialists believe we need a 3.8 trillion dollar and growing Federal Govt. and have no problem with high unemployment, high debt, and low economic growth, the new socialist normal. Welcome to Greece II and the Obama economy.

Well yes, cutting federal spending will most certainly help cause a recession.

What do you mean by me taking personal responsibility? I live in a country were our budget is not far off from being balanced.

As a socialist I believe in none of these horse**** stereotypes you've listed. A balanced budget is needed in any gov't, socialist or free market.

The 7 or 8% unemployment is not that high, honestly. Underemployment should be a bigger issue.
 
Re: Economy shrinks for first time in 3 1/2 years

We didn't cut spending OR raise taxes in the 4th quarter of 2012.

I read the article after posting that. Article does cite defence spending cuts though. My statement still stands regardless.
 
Re: Economy shrinks for first time in 3 1/2 years

Well yes, cutting federal spending will most certainly help cause a recession.

What do you mean by me taking personal responsibility? I live in a country were our budget is not far off from being balanced.

As a socialist I believe in none of these horse**** stereotypes you've listed. A balanced budget is needed in any gov't, socialist or free market.

The 7 or 8% unemployment is not that high, honestly. Underemployment should be a bigger issue.

Your opinion noted, but obviously you have no understanding of our free market economy and the components of tha teconomy

In this country there are 23 million unemployed/under employed/discouraged workers and that is the new normal here.

Name for me one successful socialist country with low unemployment, high economic growth, and no debt?

Doubt seriously that you have any clue as to how a private sector economy works or really what is going on with yours.
 
Re: Economy shrinks for first time in 3 1/2 years

I read the article after posting that. Article does cite defence spending cuts though. My statement still stands regardless.

Your opinion noted but your opinion is based upon total lack of understanding of what is going on in this country. There were no cuts in the fourth quarter in this country in any area of the budget and today we have a debt higher than our annual GDP. No country can survive those type economic results.
 
Re: Economy shrinks for first time in 3 1/2 years

Not a big surprise. Holiday spending was down, so post holiday, which is a traditionally low time of year, was bound to be down also. Though gas prices are down from a high water mark of last year, they are still high. Couple this with continued rise in food and other necessities, and the economy has to shrink. Pay is not increasing to meet the new demands on basics, so less to spend on other things. All the "stimulus" in the world is not going to change this, unless of course we hand out enough to keep pace with inflation on basic needs.

To me, this is not the first "negative" growth we have had during that time period. Anytime growth does not keep pace with inflation on basic needs, then it is not really growth. With new EPA requirements hitting the electric power industry, continued inflation on food stuffs, continued high prices for housing, etc, it will only get worse. Credit, government manipulation and other factors have created a false "high" in the economy and it will at some point have to make a gross adjustment back to where it should be. This is going to hurt and there is no real way to prevent it.
 
Re: Economy shrinks for first time in 3 1/2 years

Your opinion noted, but obviously you have no understanding of our free market economy and the components of tha teconomy

In this country there are 23 million unemployed/under employed/discouraged workers and that is the new normal here.

Name for me one successful socialist country with low unemployment, high economic growth, and no debt?

Doubt seriously that you have any clue as to how a private sector economy works or really what is going on with yours.

Whatever, ditto to you.

Which is about 8 or 9%, higher than it should be, but not astronomical like many make it out to be.

The People's Republic of China. Virtually no unemployment, an economy growing at 10%, and very low gov't debt.
 
Re: Economy shrinks for first time in 3 1/2 years

Not a big surprise. Holiday spending was down, so post holiday, which is a traditionally low time of year, was bound to be down also. Though gas prices are down from a high water mark of last year, they are still high. Couple this with continued rise in food and other necessities, and the economy has to shrink. Pay is not increasing to meet the new demands on basics, so less to spend on other things. All the "stimulus" in the world is not going to change this, unless of course we hand out enough to keep pace with inflation on basic needs.

To me, this is not the first "negative" growth we have had during that time period. Anytime growth does not keep pace with inflation on basic needs, then it is not really growth. With new EPA requirements hitting the electric power industry, continued inflation on food stuffs, continued high prices for housing, etc, it will only get worse. Credit, government manipulation and other factors have created a false "high" in the economy and it will at some point have to make a gross adjustment back to where it should be. This is going to hurt and there is no real way to prevent it.

More excuses for the very poor economic policies of a President who has no interest in the private sector economy and only interest in social justice. This President is expanding the role and scope of the Federal Govt. and supporters are getting their wish, greater dependence and power.
 
Re: Economy shrinks for first time in 3 1/2 years

Whatever, ditto to you.

Which is about 8 or 9%, higher than it should be, but not astronomical like many make it out to be.

The People's Republic of China. Virtually no unemployment, an economy growing at 10%, and very low gov't debt.

How much growth did it display before the introduction of "capitalist zones"?
 
Re: Economy shrinks for first time in 3 1/2 years

I read the article after posting that. Article does cite defence spending cuts though. My statement still stands regardless.

Your statement doesn't create an argument that justifies the decline in GDP over the 4th quarter. While in theory your point may be correct in some circumstances, it has nothing to do with what happened here. The defense spending cuts were $497 billion over 10 years. That means that we're looking at a total of $49.7 billion-ish for the next 12 months, and NOT all at once during the 4th quarter...(in fact, if you divide it by 4 you end up with $12.425 billion over three months).

Our GDP is over $13 trillion. How does $12.425 billion (ish) in defense spending cuts (some of which would have left the U.S. without entering into our economy anyway) make up the "bulk" of a 2.6% loss in growth?
 
Re: Economy shrinks for first time in 3 1/2 years

Whatever, ditto to you.

Which is about 8 or 9%, higher than it should be, but not astronomical like many make it out to be.

The People's Republic of China. Virtually no unemployment, an economy growing at 10%, and very low gov't debt.

LOL, China? how do you know what is going on in China? By the way do you want China wages? a billion people in China living in poverty and dependent on the govt. Now that is a liberal socialist dream world.

The grass is always greener on the otherside until you get there and even when a liberal gets there it is always someone else's fault for the actual conditions there thus more govt. spending needed to make the grass greener.
 
Re: Economy shrinks for first time in 3 1/2 years

Cutting spending OR raising taxes will cause recession, especially with the $1 trillion you guys need to balance. A minor recession is enevitable when balancing a deficit so large.

Nobody is "balancing" anything. Obama's idea is that raising federal spending is fine, but that any cuts in federal spending must be "balanced" by tax increases, preferably only on "the rich". The last tax increase, of $60 billion/year (on "the rich"), was immediately spent by adding $30 billion in "emergency" UI extensions and $60 billion in Sandy storm aid. Naturally the Obama "gun control" package includes more federal spending with no "pay as you go" spending cuts.
 
Re: Economy shrinks for first time in 3 1/2 years

How much growth did it display before the introduction of "capitalist zones"?

Whilst totally communist, I'm not sure. Honestly. All I know is with their current controlled free market, they're one of the fastest grow economies.
 
Re: Economy shrinks for first time in 3 1/2 years

LOL, China? how do you know what is going on in China? By the way do you want China wages? a billion people in China living in poverty and dependent on the govt. Now that is a liberal socialist dream world.

The grass is always greener on the otherside until you get there and even when a liberal gets there it is always someone else's fault for the actual conditions there thus more govt. spending needed to make the grass greener.


Never said I wanted to live China. Nor do I. You asked for a socialist country that met your criteria, and I gave you one.
 
Re: Economy shrinks for first time in 3 1/2 years

Well, we're doing fine over here in Hooterville hoping the DOW hits 14k today! Wooohooo! Way to go Obama!

USA! Number 1!
 
Re: Economy shrinks for first time in 3 1/2 years

Whilst totally communist, I'm not sure. Honestly. All I know is with their current controlled free market, they're one of the fastest grow economies.

Not much. It was the introduction of the capitalist zones and foreign investment that spurned their growth. A lot of that growth is predicated upon the fact that labor is so much cheaper there. Their previous socialist economy left them in such poverty that they now that they have dropped it, they are seeing major growth. They have to grow, since they couldn't really shrink anymore and with the labor cost differential with the rest of the world and their allowing these new zones, it is only natural that they grow. Take away the labor cost differential, and then see where they would be. Even their growth though is totally dependent upon exports to other parts of the world, internally, they cannot support growth yet.
 
Re: Economy shrinks for first time in 3 1/2 years

Your statement doesn't create an argument that justifies the decline in GDP over the 4th quarter. While in theory your point may be correct in some circumstances, it has nothing to do with what happened here. The defense spending cuts were $497 billion over 10 years. That means that we're looking at a total of $49.7 billion-ish for the next 12 months, and NOT all at once during the 4th quarter...(in fact, if you divide it by 4 you end up with $12.425 billion over three months).

Our GDP is over $13 trillion. How does $12.425 billion (ish) in defense spending cuts (some of which would have left the U.S. without entering into our economy anyway) make up the "bulk" of a 2.6% loss in growth?


It doesn't, and I admit I'm wrong in the context of this recession. But my statement still stands for any subsequent tax hikes and spending cuts.
 
Re: Economy shrinks for first time in 3 1/2 years

Not much. It was the introduction of the capitalist zones and foreign investment that spurned their growth. A lot of that growth is predicated upon the fact that labor is so much cheaper there. Their previous socialist economy left them in such poverty that they now that they have dropped it, they are seeing major growth. They have to grow, since they couldn't really shrink anymore and with the labor cost differential with the rest of the world and their allowing these new zones, it is only natural that they grow. Take away the labor cost differential, and then see where they would be. Even their growth though is totally dependent upon exports to other parts of the world, internally, they cannot support growth yet.

You seem to write this with a tone that you assume I disagree with you. Well, I don't, I agree with you totally. You though, need to stop making assumptions.
 
Re: Economy shrinks for first time in 3 1/2 years

We didn't cut spending OR raise taxes in the 4th quarter of 2012.

Tessaesque,

While it is true that no policy changes in spending or taxation were implemented during the 4th quarter, the early GDP statistics show that there was a modest dip in government spending. From the report:

Government Spending:
Q3: $2,503.1 billion
Q4: 2,460.6 billion
Change: -$42.5 billion

The Federal Government Component:
Q3: $1,045.9 billion
Q4: 1,004.4 billion
Change: -$41.5 billion

Government spending does not occur equally across the months and quarters. It fluctuates and those fluctuations likely explain the Q4 outcome vs. Q3. Most of the fluctuation was the result of the timing of defense-related expenditures, which declined $42.4 billion during Q4.

Gross private domestic investment also fell modestly, driven by a sizable drop in the change in non-farm inventories, possibly due to uncertainty concerning the fiscal cliff issue? A rebound in those inventories this quarter (2013 Q1) would suggest that such uncertainty drove the outcome. Continued weakness there would suggest broader factors and that would be a more worrisome situation.

The trade imbalance also grew, but exports (reflecting some Overseas economic headwinds) and imports both declined.

Also, this is just the first report for Q4. Subsequent revisions might yet erase the small dip in GDP, but the report will remain a weak one. The next report will be released on February 28.
 
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Re: Economy shrinks for first time in 3 1/2 years

A 40% reduction in defense spending will have some short-term economic consequences. Any cuts in spending would have this kind of consequence as less money being put into the economy will obviously affect the economy.

We can't have our cake and eat it too. We need to deal with short term detriments in order to see long term gains. If we want to address the deficit in any serious fashion, it means we'll all have to tighten our belts. Rich, poor and everyone in between. There's no magic pill solution that will make this painless.
 
Re: Economy shrinks for first time in 3 1/2 years

How about our economy is still down because many many large companies in our country are still imposing wage freezes?

Let's see....frozen wages for the past 5 years or more, plus a devaluation of the dollar to the tune of just under 3% per year...equals....what? Why, less spending power to those trapped within those wage freezes. And if people buy less ****, less **** gets sold. If less **** gets sold, less money is being made.


Now for the real question.

Why are companies STILL imposing wage freezes?
 
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