The View From 1776


Keynesian Obamanomics has delivered the weakest economic recovery in many decades, and the recovery appears to be fading as temporary Federal spending dries up.



Posted by .(JavaScript must be enabled to view this email address) on 05/24 at 06:32 PM
  1. Recovery fading?

    If you actually read your own post, Mr. Brewton, you would see that your cited sources all say the Keynesian-spending-induced growth of the economy is predicted to continue, albeit not at a dazzling 7% rate.
    Posted by .(JavaScript must be enabled to view this email address)  on  05/25  at  08:53 AM
  2. The "consensus" among economists is changing rapidly. The entire keynesian paradigm is collapsing along with the European welfare state model. One only needs eyes to see. 60 years was a good run but the check has arrived and will need to be paid. It's appropriate that a left wing ideologue/ignoramus is at the helm for the final crack-up.
    Posted by .(JavaScript must be enabled to view this email address)  on  05/25  at  11:46 AM
  3. Mr. Jay:

    What my tag line says is that the recovery is fading, which amounts to the same thing as your "...the economy is predicted to continue, albeit not at a dazzling 7% rate."

    As for actually reading my own post, as you recommend, the first two paragraphs of the IBD editorial state:

    "Evidence is mounting that the pace of economic recovery is moderating. Regional manufacturing surveys point to slower order growth. Improvement in jobless claims numbers has stalled.

    And the pace of retail sales gains seems to have slackened."

    7%, by the way is not a dazzling rate for economic recoveries. It's the rate experienced in other recoveries since the New Deal 's monumental bungling in the 1930s. Obama is simply repeating FDR's mistakes, because liberal-progressives, incapable of learning from experience, are guided by secular religious faith, not by facts.
    Posted by .(JavaScript must be enabled to view this email address)  on  05/25  at  02:50 PM
  4. First, we have to recognize that while we can have an economic improvement, we can't have a recovery. We have tried for decades to have a recovery and each time failed. As soon as we try to reverse the stimulus that gave us the improvement, we sow the seeds of the next recession.

    We increase debt and jobs that depend on government spending. It got so bad until in the 90's it took a bubble to even create an illusion of growth. Of course, we knew that was unsustainable and in Clinton's last year, saw the signs of it getting worse.

    Bush, instead of letting us have a depression and cleanse the system, chose to spend and make things worse as is this President.

    which creates US public debt which is now counter-productive: a borrowed Dollar now causes a loss of 40 cents (see chart below).

    We have had improvement in some things but not housing or employment, only stabilization that is eroding again. Banks have 9 years of inventory that they need to get rid of at the rate they are putting foreclosed homes on the market. The states have borrowed 38 billion from the Federal Government just to keep paying unemployment benefits and claim they will have to lay off 900,000 workers. Meridith Whitney believes it will be 1 to 2 million workers due to the falling tax revenues that will happen.

    As benefits run out, the unemployed will spend less, lose more homes, and cause tax revenues to fall. By propping this up, the Federal Government has made things worse, not better in the long run.

    We now, even in the President's own budget projections face interest on debt consuming 8.6% of tax revenues this year and rising to 19.3% of tax revenues by the end of the decade. GDP rises only to 4.3 and then falls. Deficits only decline to $700 billion and then rise to back over a trillion.

    The CBO warns that those projections are without any downturns, black swans, changes in lender sentiment or investor sentiment and are too optimistic.

    Everything this and the last administrations have done is making things worse. Much of the improvement was not from the stimulus which mostly went to the banks but, due to the global economy which is now in trouble.

    Europe has the potential now, since we were seeing improvement mostly due to exports to them, more than Asia, to totally ruin the global economy. They are the biggest importer from us and Asia and their austerity will drag the global economy down.

    As most of you are probably aware, Europe played a big role in our great depression.

    But most Americans don't know that the second leg of the Depression was caused by European defaults.

    As Yves Smith reminds us:

    Recall that the Great Depression nadir was the sovereign debt default phase.

    The second leg down of the Depression was larger than the first, as shown by this chart of the Dow:

    The CBO sums up the disaster the last two administration have been with this paragraph in their warning to Congress

    Page 16
    The large amounts of federal debt that would accumulate under each of CBO
    Posted by JanPBurr  on  05/25  at  03:28 PM
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