Uh-oh: GDP declined in late 2012

Arrow downJan. 30, 2013

By John Seiler

The wild spending plans of President Obama, Republican House Speaker John Boehner and Gov. Jerry Brown depend on the economy growing. This just in:

“The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.

“The economy contracted from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

“The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming spending cuts.”

Actually, the economy could handle “spending cuts,” of which there won’t be any in any case. In 1946, World War II demobilization brought a 2/3 cut in spending, yet private-sector growth zoomed 30 percent.

The real culprit is the tax increases that, in 2013, are slamming the economy. More bad news like this is going to keep coming in as government strangulates the life’s blood out of the private sector like a boa constrictor devouring a baby.

 

 

7 comments

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  1. Rob McMillin
    Rob McMillin 30 January, 2013, 06:39

    “Strangulates”?

    Reply this comment
  2. CalWatchdog
    CalWatchdog Author 30 January, 2013, 08:54

    Strangulates and devours.

    — John Seiler

    Reply this comment
  3. Hondo
    Hondo 30 January, 2013, 15:19

    Defense spending my [email protected]#. It was the trillions of dollars in deficit spending that stole from the private economy. It was the horrid regulations that Obama stole from Kalifornia to use to strangle Amerika’s economy.
    This is a Democratic slump. They were in power. They own it.
    I am proud to say I TOLE YOU SO.
    Hondo…

    Reply this comment
  4. us citizen
    us citizen 30 January, 2013, 17:37

    Ah man…….there ya go……..blaming the dems…….when we all know they are perfect……..rolling eyes here.

    Reply this comment
  5. SkippingDog
    SkippingDog 30 January, 2013, 18:49

    The real culprit was the threat of sequestration, which prevented the defense department from spending authorized funds during the last quarter to preserve their assets in the event of the threatened fiscal cliff.

    Maybe you people should read real financial news on occasion.

    Reply this comment
  6. Hondo
    Hondo 30 January, 2013, 20:38

    It has always been the democrats who love to cut defense. And the sequestration was THEIR idea.
    The real problem is that 6 TRILLION IN DEFICIT STIMULUS SPENDING didn’t work. That sequestration was just a blip on a huge economic debacle. With that much of a stimulus, the economy should be roaring along at a 2 to 3 % clip at least.
    Hondo..

    Reply this comment
  7. SkippingDog
    SkippingDog 31 January, 2013, 12:24

    The hammer of sequestration came out of a Republican House of Representatives last year when Boehner thought he could run out the clock on the Obama administration and get a better deal from Romney.

    The Democrats generally need to cut defense because when Republicans are in power they use the spectre of some “evil empire” or other boogey man to generate enough fear to support the massive contracts for weapon systems that our Defense Industrial Complex loves to sell us to solve every problem. Eisenhower – a Republican – warned us about exactly that threat, and it’s no coincidence that the defense industry is among the most generous donors to Republican candidates.

    It’s also amusing to find how many “fiscal conservatives” are reliant on defense contract money for their jobs or indirect income. Southern California in particular has long been home to rabid right-wingers who hated the government but loved working for North American, Douglas, Hughes, Lockheed, etc., all of which would be nothing without the vast amounts of tax revenues that have been directed into their coffers by compliant legislators for eight decades now.

    Reply this comment

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