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GDP: Contraction




|| By FITSNEWS || Is up down? Or is down up?  Who knows anymore …

Last week we wrote of the “double seasonal adjustment” to the U.S. economy’s first quarter gross domestic product data – which was expected to turn 0.2 percent “growth” into 1.8 percent growth. Well now we’ve got the “second” official estimate of first quarter growth (.pdf here) – in which 0.2 percent “up” has suddenly become a 0.7 percent down.

As in a contraction …  

So much for all those “rainbows and unicorns” predictions, right?

Meanwhile second quarter growth estimates (as of June 1) are currently hovering at 0.8 percent … unchanged from the previous week’s depressing outlook.

What gives?  It’s easy: The economy is stuck because consumers have no money to spend.  And they have no money to spend because their’s rampant joblessness and zero income growth.

And this phenomenon isn’t exclusive to the “new normal” either.  As government has marched on its upward trajectory over the past three decades, growth has suffered.  The U.S. economy hasn’t grown at an annual rate of three percent in ten years.  It hasn’t hit four percent growth in fifteen years.  And it hasn’t hit five percent growth in more than thirty years.

By contrast, growth exceeded five percent in twelve out of thirty years from 1950-1980.  And it exceeded four percent in seventeen out of those thirty years.

We’ve said it before and we’ll say it again: Rather than embrace the free market, the federal government has chosen to continue its entitlement perpetuationwealth redistributioncrony capitalism, welfare statism, socialized medicine and global interventionism (even though it’s already more than $18 trillion in the hole).

Until that changes, nothing will change.

Listen to us now, hear us later …