The Commerce Department has released GDP data for the fourth quarter of 2012, and these numbers indicate a contraction of an annualized .1 percent, which wasn’t exactly a crash, but it was a contraction nonetheless.
If you read my work, you already know that I don’t think there was a real economic recovery, and that we are in a significant economic depression. If you pretend that people settling for part-time work when they used to have full-time work is indicative of job growth; and think the Fed ’s buying $40 billion per month in bonds with thin-air fun bucks is good; and ignore the college graduates who can’t find jobs because they hadn’t entered the “workforce” yet and were thus not officially unemployed – then you might think I’m wrong.
A Recession is reasonably defined as two consecutive quarters of GDP contraction, courtesy of economic statistician Julius Shiskin back in the 1970’s. We have now had one quarter of contraction, albeit not a significant contraction.
The stimulus has worn off. Government spending is much like taking methamphetamine; it gives you the illusion of energy and power, for a while. The stimulus never really fixed the economy, but it did give the illusion of activity.
The hit has worn off, and the problems are coming back to the surface. The workforce participation rate has shrunk by more than 8 million people, food stamp use has increased to record levels, housing is anemic, and the trade deficit has once again soared.
If any Obamunists happens to be reading this, will you please explain this to me: If this recovery is so glorious, and the economy is so much better, then where is the productivity of the recovery? Why haven’t we seen it in the balance of trade? Why haven’t we seen it in gross tax receipts? Where is it?
Regardless, the statistics are in; one quarter of contraction. The regime will now try to explain it away, either blaming government spending cuts or Hurricane Sandy, but they also have until the end of March to try and score some more econometric methamphetamine to juice the numbers, or else we will have a recession. Officially. Again. A recession within the depression. With $17 trillion of debt to keep us company.
About the Author
Mr. Waechter is an attorney and a recent graduate of Drake University.
Sorry, comments for this entry are closed at this time.