GDP in 3rd quarter rises to 3.5%; Update: Initial jobless claims steady
posted at 10:12 am on October 29, 2009 by Ed Morrissey
The Commerce Department announced an end to the worst recession in decades today, as the third quarter of 2009 showed an annualized growth rate of 3.5%. That beat analyst expectations, which had floated around 3.0-3.3%. Federal government and consumer spending accounted for most of the growth:
The economy grew in the third quarter for the first time in a year as consumer spending and investment in new home-building rebounded, data showed on Thursday, unofficially ending the worst recession in 70 years.
The Commerce Department, in its first estimate of third-quarter gross domestic product, said the economy grew at a 3.5 percent annual rate, the fastest pace since the third quarter of 2007, after contracting 0.7 percent in the April-June period.
The growth pace in GDP, which measures total goods and services output within U.S. borders, was above market expectations for a 3.3 percent rate. The economy last grew in the second quarter of 2008.
That may also be the bad news. Sales of new homes fell last month, and inventories are not growing. With the government tax credit expiring, those new-home sales and construction will likely fall off. The third-quarter growth in that area will almost certainly represent sales shifted from future quarters, which means that the next quarter will get negatively impacted from this growth.
One key indicator continued to move downward significantly, although Reuters only reports it in the final paragraph:
Business investment fell at 2.5 percent pace, with investment nonresidential structures dropping 9 percent, a reflection of ongoing problems in the commercial property market.
In other words, what we had in the third quarter was not long-term growth based on solid investment in business. We had a flurry of federal spending and consumer behavior predicated on highly temporary government interventions, like Cash for Clunkers and the homebuyer tax credit. That may be enough to make the administration look good for the next three months, but only for that long if they don’t stimulate real investment instead of using these gimmicky programs. If we have a double dip recession after these gimmicks end, Barack Obama won’t have George Bush to kick around any longer on the economy. He’ll own it after this.
Update: In an article headlined by the AP that “First-Time Jobless Claims Drop Less Than Expected,” it turns out that they haven’t dropped hardly at all:
The number of people claiming jobless benefits for the first time dropped less than expected last week, evidence that the labor market remains weak even as the economy is recovering.
The Labor Department said Thursday its tally of newly laid-off workers seeking unemployment insurance fell by 1,000 to a seasonally-adjusted 530,000. Analysts expected a steeper drop to 521,000, according to a survey by Thomson Reuters.
The report comes the same day the Commerce Department said the economy grew at a 3.5 percent pace in the July-September quarter, snapping a streak of four straight quarters of decline. But the economy isn’t growing quickly enough to spur much hiring.
Joblessness is always a lagging indicator, but the downturn in investment in Q3 shows that the “growth” was more gimmick than reality — which is another reason why joblessness continues to increase.
Blowback
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Very true on the 3rd Qtr stuff. My wife is usally done Christmas shopping by Thanksgiving. She does some of her Christmas shopping after Christmas for the next one.
WashJeff on October 29, 2009 at 11:45 AM
Sears (?) had a christmas sale in June. I was stunned.
lorien1973 on October 29, 2009 at 11:46 AM
Small retailers, like myself, desperately rely on christmas to make the other 11 months worth the effort. If christmas isn’t half decent this year, january is gonna be a blood bath in the retail sector.
lorien1973 on October 29, 2009 at 11:44 AM
–It’s already been a disaster in the retail sector according to what I’ve seen. Look at all the vacant stores in the malls and the several very large commercial retail REITs that filed for bankruptcy.
Jimbo3 on October 29, 2009 at 11:46 AM
I’m sure this is the edited version after Rahn and Axelhead got finished with it. The fact checking will begin after next weeks elections.
bluegrass on October 29, 2009 at 11:48 AM
Good luck to you this season. I wish everyone could get the experience of running a business for a least six months. Changes your view on a lot of things. For example, sh*t does not roll down hill, it rolls up.
WashJeff on October 29, 2009 at 11:49 AM
I agree with our liberal trolls. The Great Recession is over. A robust economic recovery has begun.
With that in mind, let’s cancel the rest of the stimulus. A strong and growing economy doesn’t need it. We can also, finally, end the bail-outs and rein in goverment expenditures. The worst of the financial storm has passed, so we’re just piling up debt at this point. Besides President Obama has repeatedly pledged to do this – some time in 2013 or so – but why wait?
Happy days are here again.
Mike Honcho on October 29, 2009 at 11:49 AM
Let me get this straight. When Clinton overseas the longest streak of economic growth in American History, it’s the positive hangover from the Reagan Administration, but when Obama inherits the biggest mess since Hoover, it’s entirely Obama’s fault? The Bush influence ended January 20th?
Or is it that the Democrats in Congress had nothing to do with Reagan’s success, while the Republicans in Congress had everything to do with Clinton’s success?
You’re inability to come up with a coherent vision is astounding, but entirely consistent with the current conservative thought, which is based entirely on personality and not logic, history or science.
Bleeds Blue on October 29, 2009 at 11:50 AM
Next strip mall to be build 2 years? 3 years? 5 years? ???
Is the government allowing the banks to make BIG profits now to weather this upcoming storm of defaults? I think so.
WashJeff on October 29, 2009 at 11:50 AM
Back out cash for clunkers, inventory building and government consumption and the GDP figure is actually a negative 1.47%.
See Denninger Article…
voiceofreason on October 29, 2009 at 11:09 AM
–Why would you back out government spending from the GDP calculation?
Jimbo3 on October 29, 2009 at 11:51 AM
I almost invested in a REIT last year for its monthly dividends. Dodged a bullet. Most experts are pretty confident that commercial property is the nest shoe to drop.
BadgerHawk on October 29, 2009 at 11:51 AM
And THAT hack us conservatives off! That is one of the top two reasons the GOP lost power. I will only critize the GOP for doing that. Shame on them!
WashJeff on October 29, 2009 at 11:52 AM
It’s already been a disaster in the retail sector according to what I’ve seen. Look at all the vacant stores in the malls and the several very large commercial retail REITs that filed for bankruptcy.
Jimbo3 on October 29, 2009 at 11:46 AM
Next strip mall to be build 2 years? 3 years? 5 years? ???
Is the government allowing the banks to make BIG profits now to weather this upcoming storm of defaults? I think so.
WashJeff on October 29, 2009 at 11:50 AM
–It all depends where you live. There are two huge malls opening up in the northern suburbs of Dallas. Several strip malls (only partially filled) also opened up in my town recently.
Jimbo3 on October 29, 2009 at 11:52 AM
Governments destort markets. Deficit money spent now may impede growth in the future if the money spent does not improve economic productivity.
I would be curious to see what the “real” GDP growth during the Bush years if you remove the building bubble that occured due to government distortions. Obviously it would be less.
WashJeff on October 29, 2009 at 11:55 AM
Texas has weathered this storm better than most states. I wonder why that is?
WashJeff on October 29, 2009 at 11:55 AM
–It’s already been a disaster in the retail sector according to what I’ve seen. Look at all the vacant stores in the malls and the several very large commercial retail REITs that filed for bankruptcy.
Jimbo3 on October 29, 2009 at 11:46 AM
I almost invested in a REIT last year for its monthly dividends. Dodged a bullet. Most experts are pretty confident that commercial property is the nest shoe to drop.
BadgerHawk on October 29, 2009 at 11:51 AM
–I’ve got 15% of my relatively small 401(k) at one company in a commercial REIT fund. Got into it last January when the big REIT (I think it was General Growth) filed for bankrtupcy. It’s been a good ride, but I’m thinking I’m going to switch soon. Everything I’m seeing suggests that there’ll be a bunch of commercial real estate defaults because there’s no money available to refinance maturing relatively short term loans. You may also see that pattern in venture capital portfolio companies and some other privately held companies with significant leverage.
Bottom line: Residential housing is on its way back, but we still have a few other problems.
Jimbo3 on October 29, 2009 at 11:56 AM
That goes both ways, dude. The left has generally been reluctant to assign any blame to President Obama what so ever for the current conditions.
And even though his fiscal irresponsibility is likely to have lasting implications for decades going forward, I kind of doubt you’ll be willing to blame him for his successor’s woes the way you blame Bush now.
BadgerHawk on October 29, 2009 at 11:56 AM
That’s why I always wait to buy stuff in January! The deals are great!
simplesimon on October 29, 2009 at 11:56 AM
How long had those malls been in planning and construction? The cash was probably already procured before the 2007 crash. The real test will be how many empty shops will be in those malls this time next year. I would love to tell you things look rosy, even with the Democrats in charge, since I like money, but I’m afraid the long term view is very, very bleak.
DFCtomm on October 29, 2009 at 11:57 AM
I took a chance on a coal MLP instead, with an 11% dividend from my buy in point. It’s been good so far, but with the EPA’s recent unilateral actions I’m considering getting out.
BadgerHawk on October 29, 2009 at 11:58 AM
Texas has weathered this storm better than most states. I wonder why that is?
WashJeff on October 29, 2009 at 11:55 AM
–Because of its business-friendly attitudes and laws and relatively low cost of living, in addition to a bunch of other reasons. That draws both business and people who can work for businesses. But it’s a model that Texas has followed for decades, I’m told.
Jimbo3 on October 29, 2009 at 11:58 AM
OT: A gunshot was fired at the New Jersey home of CNN’s Lou Dobbs after a series of threatening phone calls earlier this month, the host told listeners on his nationally syndicated radio show.
OmahaConservative on October 29, 2009 at 11:59 AM
I think because it’s not real growth of any kind. It’s spending generated from a printing press, as opposed to actual revenues.
So while it looks good this quarter, it’s actually doing long term damage.
BadgerHawk on October 29, 2009 at 11:59 AM
MarkTheGreat on October 29, 2009 at 11:59 AM
Badger Hawk, I’m thinking of some gas/oil pipeline MLPs. Bought some BBB 8 year corporate bonds with yields of around 6%.
Jimbo3 on October 29, 2009 at 12:00 PM
I hate it when you make sense. It destroys the picture I have of you in my head as a cartoon.
BadgerHawk on October 29, 2009 at 12:00 PM
–Why would you back out government spending from the GDP calculation?
Jimbo3 on October 29, 2009 at 11:51 AM
I think because it’s not real growth of any kind. It’s spending generated from a printing press, as opposed to actual revenues.
So while it looks good this quarter, it’s actually doing long term damage.
BadgerHawk on October 29, 2009 at 11:59 AM
–Yeah, but the Government is always spending, so it’s too draconian to back it out completely.
Jimbo3 on October 29, 2009 at 12:01 PM
The guy on the radio just said that we recovered from our economic shrinkage.
BadgerHawk on October 29, 2009 at 12:02 PM
I’m with ya there. Believe me. Post holiday sales are the best. Dec26-31 = best time of year to buy.
lorien1973 on October 29, 2009 at 12:02 PM
Buy for the kids in December. Everything else in January. Bleed ‘em!
simplesimon on October 29, 2009 at 12:03 PM
They’re projecting again. Back when Bush was president, they prayed every night for bad news so that they could use it to attack BUsh.
They just assume that this is the way everyone operates.
MarkTheGreat on October 29, 2009 at 12:03 PM
Electronics and stuff seem to be best in January. The problem with the week after Christmas is the crowds and everything seems to be picked over.
simplesimon on October 29, 2009 at 12:04 PM
I agree, but the argument itself makes sense.
BadgerHawk on October 29, 2009 at 12:04 PM
What property taxes like in Texas in terms of percentage of home value. In my area of IL, souther suburbs of Chicago, it is about 2.2% of home value per year.
WashJeff on October 29, 2009 at 12:04 PM
I was only half-joking on the other thread when I said my e-mails indicated a strong Christmas season this year. Last year the sales started this early (I get a lot of department store notifications) and the discounts were deep. I ended up picking up a $2K suit for $600 right after Christmas.
This year, not so much, which is good news for retailers but bad for me.
Bleeds Blue on October 29, 2009 at 12:05 PM
I don’t see that. Prices in many markets are still on the decline. Plus, we’re so overbuilt we’ve got enough supply for the next five years. Some American suburbs have turned into virtual ghost towns of newly built middle class homes. And Florida is one big empty condo high rise.
flyfisher on October 29, 2009 at 12:06 PM
..and wonder what to do with the toys in June.
WashJeff on October 29, 2009 at 12:06 PM
At some point,deficits are going to run so high and tax revenues are going to be so low that government handouts are not going to be viable.
(via Instapundit)
http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/business/8331497.stm?ad=1
‘Distorted by stimulus’
Taxing to death the people who create jobs and industry growth so the government can give handouts is not economic growth.
It’s quick fix monetary suicide.
Baxter Greene on October 29, 2009 at 12:06 PM
Look at this nice conversation we’re all having. You should argue like an adult more often.
BadgerHawk on October 29, 2009 at 12:06 PM
Many of the people who took adavantage of C4C or the housing bonus didn’t adjust their witholdings either. They are going to get a nasty surprise in next years taxes.
MarkTheGreat on October 29, 2009 at 12:07 PM
Same here in Madison, which is insane. They just raised them again this year too.
BadgerHawk on October 29, 2009 at 12:08 PM
Goodwill?
simplesimon on October 29, 2009 at 12:08 PM
The new FHA fueled housing bubble is coming along nicely, but it can’t last.
DFCtomm on October 29, 2009 at 12:10 PM
The with-holding tables will revert in January, so the “tax cut” everyone got this year will be reversed and the money they “got” this year will be taken back in 2010. So the joke will be on them.
Don’t even have to wait till 2011 for the tax cuts to expire. It’s coming in January.
lorien1973 on October 29, 2009 at 12:11 PM
Yes, that and garage sales. I think garage sales, though, have some issues nowadays.
WashJeff on October 29, 2009 at 12:12 PM
Where is this “real money” of which you speak? Do you even know what real money is?
MarkTheGreat on October 29, 2009 at 12:13 PM
In my area of IL, southern suburbs of Chicago, it is about 2.2% of home value per year.
WashJeff on October 29, 2009 at 12:04 PM
Same here in Madison, which is insane. They just raised them again this year too.
BadgerHawk on October 29, 2009 at 12:08 PM
–Slightly less than 2% of current house prices, but we have no state income tax.
Jimbo3 on October 29, 2009 at 12:13 PM
In IN they passed a law to cap property taxes:
- 1.5% of value for residencies.
- 2.5% of value for businesses.
- 3.5% of value for investment property.
So in IN you just need to focus on you assessment. This is easier to defend when you can compare to other homes that have sold. Trying to fight tax rates on your assessed value is much much harder.
Mitch Daniels for Prez?
WashJeff on October 29, 2009 at 12:14 PM
“Federal Government Spending” accounted for much the “growth”.
Ain’t that peachy.
profitsbeard on October 29, 2009 at 12:14 PM
Auuuuuuughhhhhhhhhhhh (drooling)!
WashJeff on October 29, 2009 at 12:15 PM
I love read states! Wish IL was one.
WashJeff on October 29, 2009 at 12:15 PM
65? I thought that was your IQ?
MarkTheGreat on October 29, 2009 at 12:16 PM
WashJeff on October 29, 2009 at 12:15 PM
read => red
I guess I meant “well read” states.
WashJeff on October 29, 2009 at 12:16 PM
Bottom line: Residential housing is on its way back, but we still have a few other problems.
Jimbo3 on October 29, 2009 at 11:56 AM
I don’t see that. Prices in many markets are still on the decline. Plus, we’re so overbuilt we’ve got enough supply for the next five years. Some American suburbs have turned into virtual ghost towns of newly built middle class homes. And Florida is one big empty condo high rise.
flyfisher on October 29, 2009 at 12:06 PM
–Housing prices were up in most major metro areas from August to September.
Jimbo3 on October 29, 2009 at 12:16 PM
“less than expected last week”
Seriously?
SERIOUSLY?
Isn’t that another way to say, “unexpectedly”?
These people need to get a new dictionary. Reading them is like reading my b-i-l’s banking paper in which every other word was “significantly.” UGH!
UnderstandingisPower on October 29, 2009 at 12:17 PM
I’m not an economist, but doesn’t growing government spending with an ever shrinking private sector tax base make this economy top-heavy? When this thing collapses it’s gonna be ugly. The Watts riots will look like a fun day at Disneyland.
jimmy2shoes on October 29, 2009 at 12:18 PM
(To all): I lived in the Northwest suburbs of Chicago (Lake County, not Cook) for over twenty years. Loved it, but the property taxes got very expensive.
Jimbo3 on October 29, 2009 at 12:20 PM
More projection from the master of it.
I’ve seen plenty of people here criticize negative numbers when they thought the basis of those numbers was faulty.
MarkTheGreat on October 29, 2009 at 12:20 PM
I’m sure it’s the high tax rates and extravagant government social programs.
jimmy2shoes on October 29, 2009 at 12:23 PM
If government spending (your tax dollars) accounted for 1/2 of the growth – and it was a broken window, where in the long run, it’ll actually reduce the available money for future consumer spending (because people are now in debt) and the other half of the growth came from more broken window fallacies (real estate tax deductions) – was there really any growth at all?
lorien1973 on October 29, 2009 at 12:23 PM
I have no doubt that this is what you were told to believe by your cell master.
MarkTheGreat on October 29, 2009 at 12:23 PM
Yawn.
From Market Ticker:
Norwegian on October 29, 2009 at 12:24 PM
Jealous! That alone would save me 4 or 5 hundred bucks a year. Most of a mortgage payment that I instead send to our state government so they can spend it on things like making the benches around the capitol building more comfortable to sleep on. Can’t have the homeless getting a sore back!
I read somewhere recently that there was a projected drop of 11% (national average) for the upcoming year.
BadgerHawk on October 29, 2009 at 12:26 PM
LIved there too, Buffalo Grove, at it is nice. That area has gone purple. High taxes must be infecting the brain.
WashJeff on October 29, 2009 at 12:26 PM
It’s the jobs, stupid.
faraway on October 29, 2009 at 12:27 PM
IF the economic growth under Reagan’s watch was caused by deficit spending, it would be the first time in the history of the world, that deficit spending helped the economy.
MarkTheGreat on October 29, 2009 at 12:27 PM
Texas to send delegation to CA to learn from the experts.
WashJeff on October 29, 2009 at 12:28 PM
The government is like a fool with no job and no money with a credit card. They go out and buy a big-screen TV, a computer, an X-box 360, all the fun stuff they want. A casual observer, seeing those things, might think that they were well-off financially. Unfortunately, that card’s quickly going to be maxed out, and they’ll have no way of paying it off. That person hasn’t solved their money problems, they’ve compounded them.
VanPalin on October 29, 2009 at 12:28 PM
Bingo !!!
Further reinforcing my 11:01 AM prediction.
franksalterego on October 29, 2009 at 12:29 PM
Clinton inherited an economy that was already going strong.
As did Obama.
MarkTheGreat on October 29, 2009 at 12:30 PM
I would venture to guess that this increase was partially attributable to government distortion via the tax credit.
I wish liberals loved an organic economy as much as they, supposedly, love organic food. (not insinuating you are in this camp)
WashJeff on October 29, 2009 at 12:31 PM
Because it isn’t real economic activity.
MarkTheGreat on October 29, 2009 at 12:31 PM
We are 10 months into Obama’s Presidency and all the problems are still Bush’s fault in liberal land.
Glad to know that 9/11 is now officially Clinton’s fault since Bush inherited the al-qaeda war from him.
Going to piss off a lot of liberals having to change their “Bush did 9/11″ to “Clinton did 9/11″ bumper stickers.
Obama spent more money than any campaign in history to be elected President.
Obama spent 2 years or more running for President.
Obama was part of a democratic Congress that had the majority since 2006 (when the deficit was at 460 billion and liberals were ranting Bush was destroying out children’s future).
Obama and the democrats told every American over and over and over and over that they were smarter and would bring us to the promise land with their “Hope and Change”.
We now have close to a 2 trillion dollar deficit…
…Unemployment is at 10%
.…Mortgage foreclosers are at an all time high…
…..The dollar is tanking….
….violence in Iraq is escalating….
…. .the war in Afghanistan has deteriorated significantly since Obama took over(and is on his second strategy in 6 months) with the highest death totals of the war being this year…
..Russia,N.Korea,and Iran are making a mockery of “smart power” ..
…Obama has broken nearly every promise he made on the campaign trail and what do we get from liberals:
What a joke.
Obama and the democrats were a major part of this “mess” that the whiner and Chief has inherited.
liberals blamed Bush for everything that happened on his watch.
We heard for 8 years that the buck stops at the Presidents desk.
Now that Obama is behind that desk,well everything is still Bush’s fault.
Obama should never have run on “hope and change” because all we have gotten from him and the “smart ones” is a lot of “whining and blame Bush”.
Typical liberal pretzel logic.
Baxter Greene on October 29, 2009 at 12:31 PM
When were they started? If a project is almost completed, they will usually go ahead and finish it. Better to get a little bit of money from rents, then none.
MarkTheGreat on October 29, 2009 at 12:32 PM
this 3.5 number is the most artificial empty crap ever
anytime you throw a trillion+ dollars at something its going to show up somewhere. and now we’re on the hook for that crap
3.5% gdp with 17% real unemployement….uh, i dont think so
sidewinder22 on October 29, 2009 at 12:32 PM
Um… what?
BadgerHawk on October 29, 2009 at 12:33 PM
After the 94 election, Clinton did not change the tax system and, correct me if I am wrong, did not pile on regulations. So, the business community did not have moving targets and could plan for the future.
The 90′s economy was also helped by the realization of effiencies gained from technology, welfare reform, and some government spending restraint.
I would take Clinton over Obama any day. Obama will keep shifting the goalposts a la FDR and the business community will not be able to plan and adjust.
WashJeff on October 29, 2009 at 12:34 PM
So you believe that Clinton undid the Reagan tax cuts and deregulation and returned us to carter levels… thus leading to the expansion of the 90s?
Or could it be that the expansion that started with the Reagan program was accelerated when the GOP legislature got spending under control?
Sorry for the actual analysis… I know that’s confusing for you.
mankai on October 29, 2009 at 12:35 PM
Not by me. There is a really nice strip mall with NO tenants and over half of it is just the steel skeleton. Half finsished\half not. Been sitting idle for over a year.
WashJeff on October 29, 2009 at 12:35 PM
There was an article last week predicting housing prices to fall another 11% over the next year.
MarkTheGreat on October 29, 2009 at 12:36 PM
In normal times you would indeed leave government spending in the picture, but these are not normal times. Not when the Government is spending at about 200 times the normal rate with $1.4 trillion deficits and about $700 billion in unregulated money pumped into the economy in about one year. Take out the extra stuff and then you might get the real picture.
Lets face facts here. The government spent (or invested into)approximately $5-6 trillion into the US economy in one year. regular budgets, TARP, injections into the Treasury auctions, etc. At some point there had to be positive growth in the GDP. So what we have here is a return on our investment of about 2,000 to 1. Not a good return IMO.
Johnnyreb on October 29, 2009 at 12:38 PM
Fiserv Case-Shiller Home Price Insights: U.S. Housing Prices Forecast to Decrease 11 Percent over the Next Year
http://it.tmcnet.com/news/2009/10/29/4452534.htm
BROOKFIELD, Wis. –(Business Wire)– Fiserv, Inc.
Baxter Greene on October 29, 2009 at 12:41 PM
I do not believe the economy grew at all, and I am sure the revised numbers that will be coming out will reflect that.
This economy is imploding.
Dave R. on October 29, 2009 at 12:44 PM
Good. Here’s hoping they’re not cooking the books.
spmat on October 29, 2009 at 12:45 PM
When were they started? If a project is almost completed, they will usually go ahead and finish it. Better to get a little bit of money from rents, then none.
MarkTheGreat on October 29, 2009 at 12:32 PM
Not by me. There is a really nice strip mall with NO tenants and over half of it is just the steel skeleton. Half finsished\half not. Been sitting idle for over a year.
WashJeff on October 29, 2009 at 12:35 PM
Bottom line: Residential housing is on its way back, but we still have a few other problems.
Jimbo3 on October 29, 2009 at 11:56 AM
There was an article last week predicting housing prices to fall another 11% over the next year.
MarkTheGreat on October 29, 2009 at 12:36 PM
–Yeah, but the Government is always spending, so it’s too draconian to back it out completely.
Jimbo3 on October 29, 2009 at 12:01 PM
I agree, but the argument itself makes sense.
BadgerHawk on October 29, 2009 at 12:04 PM
In normal times you would indeed leave government spending in the picture, but these are not normal times. Not when the Government is spending at about 200 times the normal rate with $1.4 trillion deficits and about $700 billion in unregulated money pumped into the economy in about one year. Take out the extra stuff and then you might get the real picture.
–Bunch of answers:
1). The strip malls were started in late 2008. The larger malls must have been planned in 2007, but groundbreaking occurred in mid 2008.
2). The housing article price decline was from July 1, 2009 to July 1, 2010, not calendar year 2010. We’re already almost 4 months into that cycle.
3). Government spending may have actually dropped between Q2 and Q3. The article said that real federal government consumption expenditures and gross investment increased 7.9 percent in the third quarter, compared with an increase of 11.4 percent in the second. (I assuming these increases are comparisons are to spending in the same quarter last calendar year. We just don’t have the raw numbers at this point.)
Jimbo3 on October 29, 2009 at 12:47 PM
Those are facts and logic.
These do not matter to liberals.
I would love to have one of the democrats that support such terrible returns on our tax money be made to take their personal money and forced to put it into an investment that got such negative returns.
Kind of parallels the democrats wanting to force us to use government run health care while they get to keep their golden packages that are good enough for them but not for us.
It’s style over substance for the “smart ones”.
Baxter Greene on October 29, 2009 at 12:47 PM
I would tend to go more towards the side of Reagan leading the charge on a top marginal income tax rate reduction from 70% to 30%. The deficit spending was largely the result of a Democratic Congress who reneged on their agreement to cut spending in accordance with the tax cuts.
Oh, and the “balanced budgets” of the Clinton years never happened. They were projected surpluses that never materialized, and only through shifting Social Security surpluses to the general fund. Yes, the Republican Congress had a role in the obfustication but at least it was heading in the right direction, ending deficit spending by the federal government
And I doubt you’re going to find anyone here that will paint Bush as a saint when it comes to government spending. He signed Medicare Part D into law as well as TARP I, neither of which resulted in lower medical costs or the cleansing of bank balance sheets. But it did give the pharmaceutical companies political cover as well as allow the fraud to continue in the banking industry, so I suppose some people benefited.
It still doesn’t absolve Obama of his role in TARP I (Unless I’m mistaken he voted for it) TARP II, as well as his continued efforts to pile on even more debt in the form of health care “reform”. As before, TARP II has done nothing to fix the underlying debt problems, it has only propped up banks and financial institutions (who have the President and a good chunk of Congress sufficiently bribed) that in a free-market economy would have rightly collapsed long ago.
It simply cannot continue, eventually the combination of lower tax revenues with higher debt leads to a runaway debt service burden that will cause the whole financial system to collapse.
Debt-based recessions can only be exited by paying down debt or defaulting on it. The first one isn’t bloody likely, the federal government will continue to deficit spend until there are no other options, with its last desperate act being to print its way out.
Neither party is innocent in this scam but you have to admit that the Democrats have led the charge into this debt-based mess ever since the days of the New (Raw) Deal. They have an incurable addiction to spending other people’s money and it cannot go on much longer.
TheMightyMonarch on October 29, 2009 at 12:48 PM
over twenty years. Loved it, but the property taxes got very expensive.
Jimbo3 on October 29, 2009 at 12:20 PM
LIved there too, Buffalo Grove, at it is nice. That area has gone purple. High taxes must be infecting the brain.
WashJeff
-Lake Zurich and Arlington Heights. Used to go to the Sam’s Club in Buffalo Grove.
–Are you in D.C.-type Washington or are you in Seattle-type Washington (if you care to answer).
Jimbo3 on October 29, 2009 at 12:52 PM
Just more “SPIN” before next week’s elections.
DL13 on October 29, 2009 at 12:56 PM
Because, Gov’t spending is a zero sum activity. It is paid for by siphoning money from Consumption, Investment, and import/export activities. The exception to this is DEFICIT SPENDING, which is paid for by FUTURE TAXATION.
Fighton03 on October 29, 2009 at 12:56 PM
This is exactly the equation I referenced in my earlier post. American citizens, purchasing goods has always been the real fuel that powers our economy. It keeps the boiler running, so to speak. That boiler is the production chain.
When that fuel runs low, the boiler cools off and the pipes freeze. Its very simple. Unemployed and homeless do not purchase extras, Christmas gifts or much else.
Fabricated economic news doesn’t help, because anyone but the most dense or rabid, possess excellent BS detectors and act accordingly.
dogsoldier on October 29, 2009 at 12:57 PM
Obama’s massively expanded budget will create trillion dollar deficits for the next 10 years. In 2019 they are predicted to be 1.75 trillion. And that takes into account all Bush tax cuts ending in 14 months.
That’s Obama’s fault and no one else’s.
Chuck Schick on October 29, 2009 at 1:00 PM
GDP for clunkers
faraway on October 29, 2009 at 1:00 PM
It would be difficult for government spending not to drop off from Q1 and Q2. But if it’s possible for it to grow, I’m confident President Obama will find a way.
BadgerHawk on October 29, 2009 at 1:02 PM
His name is a combination of Washington and Jefferson, I believe. He’s still stuck in IL.
BadgerHawk on October 29, 2009 at 1:04 PM
I am in neither. I live in Frankfort, IL. My sign-on name si a splce of Washington and Jefferson.
A.H. did a good job with their downtown 10 years ago…looks nice. I assume those areas are having a little tougher time with Motorola’s issues.
WashJeff on October 29, 2009 at 1:04 PM
“GDP in 3rd quarter rises to 3.5%”
Yeah, and i’ve got a bridge i’d love to sell you.
RedbonePro on October 29, 2009 at 1:05 PM
No not totally Obama’s fault. Barney Frank had a lot to do with it as well. Matter of fact, a lot dem’s had a lot to do with it. I believe Freddie Mac/Fannie May are the key words here…
RedbonePro on October 29, 2009 at 1:08 PM
Put succinctly, I blame government.
WashJeff on October 29, 2009 at 1:13 PM
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