Hunkering down for Term 2, GDP Edition

http://legalinsurrection.com/2013/01/hunkering-down-for-term-2-gdp-edition/

To all the realists out there, how do we go from 3.1% real GDP growth in the third quarter to 0.1% real GDP decline in the fourth quarter? How do things change so quickly?

That would be consistent with my theory back in October that hope that Romney might win was lifting the nation’s economic mood, Unexpected jump in consumer sentiment coincides with polls showing Obama could lose.

In other words, we the makers who were hopeful of a Romney win, when he lost, we the makers who do the bulk of the economic activity pulled back and settled in for the long haul (back to going Galt). The makers clearly have a greater economic impact with our spending decisions than the takers who are scraping by on hand outs. This would be a reasonable alternative explanation to the conspiracy theory that the government fudged the numbers initially to later correct the misinformation after the election was done so the bad news couldn’t be used against Obama.

I believe there is some truth to that conspiracy theory but one must ask if the bureaucrats were so willing to fudge the numbers at the beginning, why bother correcting it later when the propaganda value would be lost for later use? Why bother to lie and not keep lying? I suppose one could argue that fudging the numbers is a sign of compromised ethics but also a sign of guilt made right later by telling the truth after the fact to retain a semblance of credibility for the next well timed misinformation campaign.

Anyway, another excuse is that the supposed “GOP threat” of sequestration caused it. Odd, since a) sequestration was a White House proposal and b) the “threat” has been there for a while now, it’s all of a sudden causing contraction and/or slowing growth?

Also, I think there is a chance future revisions will move the number slightly *lower.*

http://newsninja2012.com/tea-party-founder-rick-santelli-blows-his-top-when-you-act-like-europe-you-get-growth-rates-like-europe/#axzz2JTwlKVrW

someone is suggesting another stimulus as in tax cuts…

$312 Billion In Debt “Adds” Negative $5 Billion In GDP

http://www.zerohedge.com/news/2013-01-30/chart-quarter-312-billion-debt-adds-negative-5-billion-gdp

Since government borrowing accounted for a significant share of any meager quarterly economic activity ( most of which is money injected by the Fed via it’s purchases of Treasuries) at which point does one concede that merely spending money does not create GDP. At some point you got to make “stuff”.

I doubt any expansion of exports is going to cover losses like this. Europe is doing terribly and China not far behind so don’t count on them to buy our stuff. BTW-Whatever happened to the US being the economic engine of the world?

At what does Obama concede his economic policies have failed? Probably never.

BTW- the libs have been ginning up the idea that automation has reached a point that high unemployment will be a given from here on out. It’s not Obama’s fault, its those darn ATMs. The Bush card has been used up, now it’s time to pin the tail on another donkey.

How many times did I point out prior to November 2012, the economy was going into recession? All the signs were there, I kept pointing. This would be a good point to review the Great Depression GDP figures from 1927 to 1940.

- The only government spending that was cut was defense spending.
- The implied 4Q inflation rate of 0.6% – ((4QNGDP/4QRGDP)/(3QNGDP/3QRDGP))^4 – seems awfully low, and conveniently so.

That’s the comment of the day.

I’m guessing that the next two revisions will move it back to slightly positive (maybe they underestimated gun purchases – LOL), but the tax increases, ObamaCare, and other overhang could very well move things into the negative after that.

And what a great time for Shamnesty! Zheesh.