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

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

iguanaman said:

It is better than recession. That's what the Europeans found out. Besides the wealthy don't spend more than a few % of their incomes so their money is put back in the economy instead of hedge funds when Govt. spends it.

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And every one of those countries spends and taxes more than us as a % of gdp.

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

disneydude said:

LOL...I've been hearing that for the last twenty years. We are talking about a drop in a bucket here...and California could USE a few less people. There are too many people here already. It is expensive to live in California for good reason...because people WANT to live here. That makes it difficult for some people people you can't live here on a minimum wage job like you can in North Dakota, Kansas or Texas.

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Yes, illegals want to live there, collect welfare and have their medical bills paid.

If you have been hearing it for 20 years then that should have been warning enough. You have no one to blame then but yourselves.

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

head of joaquin said:

No, macroeconomic do not follow the same "rules' as macroeconomics, as every economic study shows, libertarian metaphors notwithstanding. For instance, thrift is not reward on the macroeconomic level, and lots of credit can produce lots of economic growth and wealth. Indeed, it is the basis of modern capitalism and the system you live in and benefit from, but apparently don't understand.

For instance cutting taxes on the rich leads to income gaps, which lead to high risk investing, which leads to bubbles, which leads to recession. Every single recession in the US has been preceeded by a spike in the income gap -- the bigger the spike, the worse the recession.

Thus Bush's tax cuts for Paris Hilton lead directly to the Bush Meltdown, the biggest recession in 70 years. See how it works: macroeconomics is its own bag and it has nothing to do with libertarian and tea party nostrums about being thrifty.

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I didn't say macroeconomics I said MICROECONOMICS.

This clearly shows you're clueless to economics.... Microeconomics - Wikipedia, the free encyclopedia

Progressives generally have a hard time wrapping their head around microeconomics because the term "budget" is an alien word to them. Progressives generally adhere to: "spend as much as you want now and worry about paying the debt later when it comes." Of course then they cry about big business, banks or Wall Street when they come and take their house away to payoff their debt.

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

disneydude said:

LOL....arguing out of both sides of your mouth again.

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Isn't it time for your shift duties at Disneyland? Since apparently you aren't making enough to pay for the services residents of California demand the financial mess your state is in doesn't matter at all.

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

danarhea said:

1) Conservatives don't like government spending.

2) Government spending declined by 22.2% during the 4th quarter of last year.

3) Reduced government spending is the reason the economy contracted by 0.1%.

Sounds to me like you are blaming Obama for the government reducing it's spending last year. I thought reduced government spending was something you were in favor of.

4) So are you a tax and spend Liberal? :mrgreen:

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No, I am holding Obama responsible for not creating incentive to offset this meager so called cut in Govt. spending. Doesn't seem to resonate with many here that govt. spending is paid for by taxes which reduce personal take home pay and affect the largest category in GDP, consumer spending. This economy should be growing well over 4% a year especially after the recession ended. Obama doesn't want a growing economy, he wants Obamabots that are dependent on govt.

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

Grant said:

Reduced for the first 1/4? How did it do for the year?

The fact is that there have been no budgets passed and money is being borrowed in order to try and meet government spending, with records of trillions in debt and more people dependent on government than ever before in American history. Do Leftists feel this is a good sustainable policy?

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For the year as a whole, the economy expanded, but the government itself was contributing to that..... And thus the quandry. Can government pull us out of recession? Yes it can, but that comes with a caveat, which is an even greater debt, which will eventually lead us back to where we are now. Government spending, while useful for the short term, is nothing more than a band-aid on the real problem, which is debt. As long as the government attempts to spend us out of recession, it will always circle and come back to us, and once again, we are faced with a problem. This is much like a dog chasing his tail.... A lot of energy expended, but no real long term solution.

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

ReformCollege said:

And every one of those countries spends and taxes more than us as a % of gdp.

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True.

But we have to be cautious in our interpretations. Denmark, for example, has a very high government spenidng per GDP - but it also has an excellent record in most every other aspect of economic policy: free trade, labor flexibility, regulations, you name it. All things considered, it actually ends up as a place MORE free-market than the US of A - according to the Heritage Foundation, anyway:

Index of Economic Freedom: Promoting Economic Opportunity and Prosperity by Country

Now, small countries like Denmark or (very low spending) Switzerland (not to mention our libertarian darling HK) should probably be edited out of competition (Apples and oranges, really: Denmark could be compared with New Hampshire or Minnesota, not the whole USA).

If we look at comparable entities, you have Canada (about the same expenditure, better results, but it may be just because of the natural resources boom), Japan (lower spending, stagnation - and a huge national debt in the background, although structured in a very different way), Australia (lower spending, otherwise see "Canada").

Clearly, as Switzerland, New Zealand, Aussies, et al can testify, a lower tax burden and a lower federal spending than ours are quite compatible with both prosperity and "higher equality", if that's your thing. Otherwise, "certainly inconclusive".

We tend to think about taxation, spending etc in highly abstract terms. But (without surrendering an ounce of my libertarian credo), I am happy to report that Denmark (where I have solid academic and business connections) is a cheerful, relaxed, fat and free country. And nowhere else - not even in New Hampshire - I have met so many hard-core libertarians. They are just not all that worried about taxes per se. "Hey, when I get rich, I will donate half of my of fortune to other Danes anyway. Who cares how it is done - through a charitable foundation, or through Her Royal Majesty's offices?" Now, tell the same people that it's OK to slap a tariff on foreign goods to protect a local underperformer, or that someone could be forced to pay union dues while not being a union member - they will instantly switch into a Viking berserker mode that would make our most ardent tea partiers look like Buddhist nuns studying accounting.

Really, it is a matter of trust. In a small country, in the "one big family",when you can easily verify that your tax money is actually being spent on fixing roads and buying power tools for a handyman out of his luck - well, lowering the tax burden is not a high priority there, not even for a convinced libertarian. One day ...- plenty of other things to do.

But we are not Denmark. Our small-town social cohesion is a distant memory. Do we have any reason to trust the wheelers and dealers in DC as much as an average Dane trusts his elected representatives, in the country of 5 million? (You know it is a rhetorical question).

........

Der er et yndigt land.

(It really is yndigt I highly recommend

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

disneydude said:

LOL...I've been hearing that for the last
twenty years. We are talking about a drop in a bucket here...and California could USE a few less people. There are too many people here already. It is expensive to live in California for good reason...because people WANT to live here. That makes it difficult for some people people you can't live here on a minimum wage job like you can in North Dakota, Kansas or Texas.

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DisneyDude are you an "imagineer" at Disney ?

Hey if you have any say dont let them destroy the Star Wars Saga.

Anywhoo...Your take is a interesting one no doubt. Jerry Brown raised taxes to run people out ? Hmmmm.

Realistically less population and Capital flight isn't good for any State so I sincerely doubt making Cali a rich folk destination is yoir Govenors intention.

Rich folk dont typically like being fleeced by the local Govt

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

Grant said:

Yes, illegals want to live there, collect welfare and have their medical bills paid.

If you have been hearing it for 20 years then that should have been warning enough. You have no one to blame then but yourselves.

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Don't worry about us.....we are doing just fine....thank you. We feel sorry for the poor schmucks that don't have the same opportunities that we do.

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

Fenton said:

DisneyDude are you an "imagineer" at Disney ?

Hey if you have any say dont let them destroy the Star Wars Saga.

Anywhoo...Your take is a interesting one no doubt. Jerry Brown raised taxes to run people out ? Hmmmm.

Realistically less population and Capital flight isn't good for any State so I sincerely doubt making Cali a rich folk destination is yoir Govenors intention.

Rich folk dont typically like being fleeced by the local Govt

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I never said that Jerry Brown raised taxes to run people out. The reality is...California, particularly Los Angeles are expensive areas to live. Why? Because people WANT to live here. Unfortunately the high cost of living runs some people out...thats an unfortunate consequence. But people here understand that the luxury of living in Southern California comes with a cost. We expect to pay more in taxes than people living in Wyoming, Idaho or Texas....its supply and demand. You go to a place where people actually WANT to live and you are going to have to pay more. That's why there is a price difference between Filet Mignon and Ground Beef.

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

disneydude said:

I never said that Jerry Brown raised taxes to run people out. The reality
is...California, particularly Los Angeles are expensive areas to live. Why? Because people WANT to live here. Unfortunately the high cost of living runs some people out...thats an unfortunate consequence. But people here understand that the luxury of living in Southern California comes with a cost. We expect to pay more in taxes than people living in Wyoming, Idaho or Texas....its supply and demand. You go to a place where people actually WANT to live and you are going to have to pay more. That's why there is a price difference between Filet Mignon and Ground Beef.

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LOL !! Fillet Mignon or Ground Beef...

You know in Houston we're having a little problem with California General Contractors trying to come in and take advantage of our growing economy.

My brothers a Texas General Contractor and its only from Cali apparently. Thry send their little teams and bid on Construction amd are home based out of your hell hole of a state.

And NO, Californias not more expensive because its better, its more expensive because the locals are so bereft of natural human cognissense they have no idea they're getting fleeced.

People are leaving that once great state, people with means because they're waking up and tired of giving up so much to the State Govt.

Ive been to So Cal, Berkely, San Fran, sure its nice but in no way does the price justify the land and/or weather.

Thank God for Texas, were literally proving that a progressive approach is the wrong way to run a local economy, by doing the polar opposite.

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

Fenton said:

Post the Fed spending portion of that 3rd Quarter GDP.

Why criticize me for not looking into the "nuts and bolts" of the 3.1% GDP #s and then not post the pertinent information that shows why it was inflated ?

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The Federal contribution to the Q3 figures was .71%, while the contribution from gross private investment was .85%. You were simply incorrect.

Perhaps because the relevant document was smack dab in front of your face yet you insisted on skimming headlines from the blogosphere for analysis.

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

head of joaquin said:

No......

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Still want to stick to that 3% growth prediction you made a while back to me? You remember right? The one where you said the economy would grow by 3% in the first quarter of 2013? Just checking.

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

a351 said:

The Federal contribution to the Q3 figures was .71%, while the contribution from gross private investment was .85%. You were simply incorrect.

Perhaps because the relevant document was smack dab in front of your face yet you insisted on skimming headlines from the blogosphere for analysis.

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No, you just don't possess the integrity to tell the truth about the 3rd quarter GDP. Drop the Govt expenditures and the GDP is actual around 1.6%. Real federal government consumption expenditures and gross investment increased 9.6 percent in the third quarter, in contrast to a decrease of 0.2 percent in the second.

Keep it up, your lying and mitigation. It just underscores the desperation from the left. Hyperbole, demagogy, diversions and dishonesty.....it's the fundamental basis of every progressive's post.

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

Fenton said:

No, you just don't possess the integrity to tell the truth about the 3rd quarter GDP.

Drop the Govt expenditures and the GDP is actual around 1.6%.

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I've provided you with the actual documentation, which reads as posted previously. You're arguing against your own source at this point.

Federal expenditures contributed .71 percentage points to the third quarter gdp figures, which tallied 3.1% in total. Once again, you're batting a fat .000 here.

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

Personally, I think this GDP report is actually showing the US economy is coming back very strongly now. While it showed a -.1% growth, most of this decline was due a decrease in inventories, decrease in government defense spending, and a decrease in exports. The lower inventories show that aggregate demand is stronger than expected. The economy will rebound to rebuild these inventories to adjust for the higher demand. Also, while exports were a drag, the IMF has shown that it expects global demand to grow faster in 2013. The euro zone will be the only drag. Finally defense spending is something that can be ironed out in congress. While I am not too impressed with this congress, I think that they will take the hint from this GDP report and realize that lowering spending too drastically will result in poor economic performance in the short term. This, if anything, will help to spur some good negotiations in DC.

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

a351 said:

I've provided you with the actual documentation, which reads as posted previously. You're arguing against your own source at this point.

Federal expenditures contributed .71 percentage points to the third quarter gdp figures, which tallied 3.1% in total. Once again, you're batting a fat .000 here.

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From your "document"........

Real federal government consumption expenditures and gross investment increased 9.5 percent
in the third quarter, in contrast to a decrease of 0.2 percent in the second. National defense increased
12.9 percent, in contrast to a decrease of 0.2 percent. Nondefense increased 3.0 percent, in contrast to a
decrease of 0.4 percent. Real state and local government consumption expenditures and gross
investment increased 0.3 percent, in contrast to a decrease of 1.0 percent."

Also...

" The acceleration in real GDP in the third quarter primarily reflected upturns in private inventory
investment and in federal government spending, a downturn in imports, an upturn in state and local
government spending, and an acceleration in residential fixed investment that were partly offset by a
downturn in nonresidential fixed investment and a deceleration in exports."

But hey, you guys are doin' great. Just awesome. Keep up the good work.

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

drz-400 said:

Personally, I think this GDP report is actually showing the US economy is coming back very strongly now. While it showed a -.1% growth, most of this decline was due a decrease in inventories, decrease in government defense spending, and a decrease in exports. The lower inventories show that aggregate demand is stronger than expected. The economy will rebound to rebuild these inventories to adjust for the higher demand. Also, while exports were a drag, the IMF has shown that it expects global demand to grow faster in 2013. The euro zone will be the only drag. Finally defense spending is something that can be ironed out in congress. While I am not too impressed with this congress, I think that they will take the hint from this GDP report and realize that lowering spending too drastically will result in poor economic performance in the short term. This, if anything, will help to spur some good negotiations in DC.

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Seriously ? It showed a 1% loss BTW. I guarantee you this won't get better and I cant figure out what "increased demand" your referring too. How does Govt spending with borrowed money equal a positive indication in economic growth ?

You Libs and your attempt to put lipstick on this pig of a economy is akin to a mass delusion. A acute pathological event because none of you apparently have the integrity to walk back any of your destructive positions and ideology when it's more than apparent it's creating misery and joblessness.

This was the Holiday season too. A miserable Holiday season for consumers, and you think it's going to get better ? What's better to a unrepentant liberal ?

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

Fenton said:

From your "document"........

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Great work with the copy/paste. Looks like reading comprehension is the next hurdle.

Fenton said:

It was a massive increase in Federal expenditures, WITH BORROWED MONEY NO LESS, not "private investment"

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Copy/Paste Paragraph that Fenton posts in order to prove above point said:

" The acceleration in real GDP in the third quarter primarily reflected upturns in private inventory
investment and in federal government spending

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As mentioned previously, if you actually take the precious few minutes to read up on the material you're seemingly so familiar with, you'd see that private investment played a larger role in the Q3 increase than did Federal spending. This is no longer a debatable issue, you're simply in the wrong here. Water is wet. Sky is blue.

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

Fenton said:

Seriously ? It showed a 1% loss BTW. I guarantee you this won't get better and I cant figure out what "increased demand" your referring too. How does Govt spending with borrowed money equal a positive indication in economic growth ?

You Libs and your attempt to put lipstick on this pig of a economy is akin to a mass delusion. A acute pathological event because none of you apparently have the integrity to walk back any of your destructive positions and ideology when it's more than apparent it's creating misery and joblessness.

This was the Holiday season too. A miserable Holiday season for consumers, and you think it's going to get better ? What's better to a unrepentant liberal ?

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I bet next quarter it is 2-3%, if not more. And it was -.1%, I have double and triple checked on the BEA website.

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

Fenton said:

Seriously ? It showed a 1% loss BTW. I guarantee you this won't get better and I cant figure out what "increased demand" your referring too. How does Govt spending with borrowed money equal a positive indication in economic growth ?

You Libs and your attempt to put lipstick on this pig of a economy is akin to a mass delusion. A acute pathological event because none of you apparently have the integrity to walk back any of your destructive positions and ideology when it's more than apparent it's creating misery and joblessness.

This was the Holiday season too. A miserable Holiday season for consumers, and you think it's going to get better ? What's better to a unrepentant liberal ?

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President Obama is responsible for the slowest recovery from a recession in American history.......

That says it all.....

Of course, when we finally Do get a stronger recovery, no doubt the media will tell us about how "brilliant" President Poodle Muncher was to "engineer" it.....

But he's already accomplished the biggest fail in our history.

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

We are still 5% high on taxes versus GDP at 25%. We arent talking spending decreases---we are talking tax increases on a strained private sector. Its possible for things to get worse, not better.

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

Keep in mind this is a preliminary number as well. It would not surprise me if it is revised upward by 1% or more at the end of Feb.

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

drz-400 said:

Keep in mind this is a preliminary number as well. It would not surprise me if it is revised upward by 1% or more at the end of Feb.

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downward is more likely. Nothing in Obama's economy ever gets revised upward, as in things are better off than they thought.

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

Fenton said:

downward is more likely. Nothing in Obama's economy ever gets revised upward, as in things are better off than they thought.

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Last GDP report (Q3), the advanced number was 2%, which was later revised to 3.1%.