Many of us know that the US economy is fundamentally weak; the data don’t really support much of the “Recovery-speak” spun by Washington and its pool of lapdog economists.
Held against the light of all the extraordinary measures taken by the Federal Reserve and Treasury over the last several years, the results are downright awful.
Besides, the crisis was four years ago. Our real gross domestic product for the fourth quarter stunningly fell 0.1 percent — much weaker than the already lowered expectations.
Some will say that the 2012 economy ended with a limp performance, but in reality the whole year was weak. For the year, GDP came in at a shaky 2.2 percent. Worse, though, is that measured from the fourth quarter of 2011 to the fourth quarter of 2012, real GDP increased barely 1.5 percent. Every time that’s happened since 1948, when the measuring began, readings this low predated a recession.
Don’t be fooled into looking at the Dow as your economic barometer. That’s for the lazy, the amateurs, the armchair partisan economists. The Dow is going up for different reasons.
Ironically, it was the heavy hand of government lifting as it moderated its big spending habits that brought Q4 GDP to its knees. The third quarter, leading up to the election, was a barnburner at 3.1 percent — due to massive DC spending.
Government spending was like borrowing from Peter to pay Paul; it took away from the fourth quarter mightily.
Just look around: Very few businesses are in an expansion or hiring mode, and irrespective of industry, job security remains very shaky, and real wage growth nonexistent.
The problem with big government spending is that economies become too reliant on it, as Europe — and now we — have.
Governmental economic intervention on the very rare occasion that it is needed has to be much more surgical, like a Special Ops mission: Get in, get out, get home. Without real, legitimate growth we’ll never solve the nation’s economic woes. Stumbling, flat and dependent economies don’t create real sustainable jobs.
An (adapted) economic proverb: Give an economy growth from government spending, you grow it for a day. Set up the economy to grow, and you give it growth for a lifetime.