Want to see something *really* scary?? (the Truth about our GDP)

[Roland99]

http://www.financialsense.com.nyud.net:8090/Market/cpuplava/2006/images/0125.a.gif

[ChairmanAgnostic]

1. I sensed this, but SEEING IT is something else all together.

Thank you Neocon economists.

[CoffeeCat]

6. The sick thing...

...is that the true numbers are not being reported.

People hear the GDP numbers, and they think all is fine and dandy.

This really explains the economic schizophrenia in our country today. So many people
say the economy sucks. Many are out of jobs, or underemployed. There are so many
people living at or below poverty. However, the numbers are so pretty and shiny!

For months, right-wing hate radio has been positioning those who believe the economy is bad--
as negative freaks who lack intelligence. If you believe the economy is not doing well--then
you're just an uninformed, really unpleasant person who needs something to worry about.

These numbers demonstrate that the carcass is rotting--and that those who smell the stench
are not making it up.

I'm so sick of these lying bastards.

[seabeyond]

31. explain please, what it is saying n/t

[EC]

32. It looks like what it is saying

is it's all on paper with no liquid assets behind it, since they are counting the inflated equity into the final figures...(rather everyone is borrowing on their homes to keep going and this is counted in the GDP as assets, even though it's used equity and no longer an asset)

[seabeyond]

38. appreciate it thank you. n/t

[Roland99]

33. It's saying that the bulk of the "growth" in the GDP is from DEBT.

Borrowed money from equity in homes is what is making up the Gross Domestic Product growth.

Take away the borrowing on home equity and we are in a completely flat economic period. This is extremely dangerous as once the housing bubble bursts (as it's starting to do in some areas), that equity will dry up and even cause some to lose their homes as the appraisal price drops below the mortgage amount and banks start getting scared. Once that happens, buh-bye economy!

[merbex]

35. Anyone that bought a house within the last year and didn't pay

practically the whole thing in cash is screwed

I figure that those with $100,000-%150,000 left on their mortgages are okay as long as they don't lose their jobs

Jumbo mortgages?! I wouldn't be able to sleep at night

[seabeyond]

36. i see i see.

i have been watching what bush has done to economy and lied all the way thru. also started a business working on 4? years ago, so have watched how the economy has effected that and the tell tale signs from my business on the economy. appreciate your insight. no surprise here

[Roland99]

41. I've seen it coming and have been harping on this for at least a year.

I keep getting called some "doom and gloom pessimist".

I just try to be a realist.

[seabeyond]

49. hey, i have been cutting back on what goes out and hording

no desires, very few wants.......

i am with you. the thing, they have manipulated it in different ways, it is taking a while comin. but math 101 they are gutting everything that gives an economic foundation

[Roland99]

52. That's the key. Simplify. Get rid of unnecessary expenses.

And save, Save, SAVE!

[seabeyond]

53. right on. this is what i have been feeling. for a while now. ty n/t

[leftchick]

54. has any administration in history gotten away with this?

fudging the numbers? I suspect regun may have but I do not recall?

[Roland99]

58. Not with GDP that I know of...unemployment numbers have been bogus

since at least early in the Clinton years but GDP is a whole other matter.


And, this administration is far from finished.

[dchill]

37. That was my EXACT reaction.

Neoconomy. Finance deficit by printing money.

[Roland99]

48. And it's not over. Remember, they're going to stop publishing value of M3

Trying to hide the speed of the money printing presses.

And just wait until the next Director of the CBO is appointed as Holtz-Eakin stepped down this past fall. If it's filled with a partisan/crony.... :scared:

[CoffeeCat]

2. Holy frickin crickey!

I've got several thoughts...

I had no idea that MEW was a part of GDP. GDP is a measure of the total goods/services
produced by our economy, correct?

Why would borrowing against a mortgage be included as part of GDP? Has it always been a part
of the GDP measure?

Or is 'MEW as part of GDP'--a Bushism? Remember when he tried to say that manufacturing jobs
were on the rise? It turned out that Bush redefined what a "manufacturing job" was and he
began including fast-food and other minimum-wage positions in the "manufacturing" category.
This puffed up the numbers, but manufacturing job growth was not happening.

This chart is incredibly scary. Our economy is tanking and its being covered up with
statistical nonsense---if I'm understanding all of this correctly.

[Roland99]

5. Here's the full article at calculatedrisk.blogspot.com >>>>

http://calculatedrisk.blogspot.com/2005/12/gdp-growth-with-and-without-mortgage.html

[bananas]

10. Holy crap - "CNN: There go 800,000 jobs out the door"

link from that blog article
http://money.cnn.com/2005/12/08/news/economy/housing_bubble_jobs/?cnn=yes

[dchill]

39. Why would borrowing ...

against a mortgage be included as part of GDP? For the same reason that flipping burgers is now counted as a manufacturing job. Faking the numbers, that's all.

[Roland99]

45. Well, it's not included specifically...it's the money from the borrowing..

Say you borrow $50,000 against your home and that money goes to remodel it or buy a car or something. That $50,000 goes into the economy as it's purchasing products, paying for labor, etc.

But, that $50,000 becomes a liability on you personally. If you lose your job via firing, disability, illness, etc. and that mortgage becomes unaffordable, you default on the loan and the bank repossesses the house and eventually (likely) takes a loss. Your credit is screwed and you're now living a much lower standard of living.

Also, if your house's appraisal drops below the amount mortgaged, the bank could force you to pay off enough of the mortgage to make up for the difference. Again, this is putting a huge burden on you, individually.

This economic recovery is a false one. Corporations are seeing profits (from the increased spending by individuals, a lot from deficit spending), but aren't passing those profits down as increased salary, better benefits for its employees. They're holding tight to that money but letting some out to increase the execs' pay exhorbitantly.

Time is coming to pay the piper. Guess who's going to be stuck with the bill?



Hope you like soup lines.

[magellan]

3. Wow

If we get three red bars in a row going down, do we get a prize?

[Hestia]

4. I need to find that article about the 2 economy's

This is also in response to the article re: laptop stolen in Texas.

The Fed's KNOW exactly who has their identies stolen - these 2nd people have been buying houses and car with the stolen ID's. They do a credit check on them, they are approved, know good and damn well that these are not the correct people taking out these loans. That is why there has been a rash of laptops with all the information and the computer tapes and the hacking of data miners being allowed to be stolen all over the US.

Anyway, the jist was, we would already be in a Depression without these 2nd people pumping up the economy. It is delaying the inevitable, and making * look good.

[Roland99]

8. Not sure the articles you're referring but here are two from The Economist

Danger time for America
http://www.economist.com/finance/displayStory.cfm?story_id=5381959

The economy's greater flexibility may indeed provide a shock-absorber. A spurt in productivity has also boosted growth. But the main reason why America's growth has remained strong in recent years has been a massive monetary stimulus. The Fed held real interest rates negative for several years, and even today real rates remain low. Thanks to globalisation, new technology and that vaunted flexibility, which have all helped to reduce the prices of many goods, cheap money has not spilled into traditional inflation, but into rising asset prices instead—first equities and now housing. The Economist has long criticised Mr Greenspan for not trying to restrain the stockmarket bubble in the late 1990s, and then, after it burst, for inflating a housing bubble by holding interest rates low for so long (see article). The problem is not the rising asset prices themselves but rather their effect on the economy. By borrowing against capital gains on their homes, households have been able to consume more than they earn. Robust consumer spending has boosted GDP growth, but at the cost of a negative personal saving rate, a growing burden of household debt and a huge current-account deficit.

...

As a result of weaker job creation than usual and sluggish real wage growth, American incomes have increased much more slowly than in previous recoveries. According to Morgan Stanley, over the past four years total private-sector labour compensation has risen by only 12% in real terms, compared with an average gain of 20% over the comparable period of the previous five expansions. Without strong gains in incomes, the growth in consumer spending has to a large extent been based on increases in house prices and credit. In recent months Mr Greenspan himself has given warnings that house prices may fall, and that this in turn could cause consumer spending to slow. In addition, he suggests that foreigners will eventually become less eager to finance the current-account deficit. Central banks in Asia and oil-producing countries have so far been happy to buy dollar assets in order to hold down their own currencies. However, there is a limit to their willingness to keep accumulating dollar reserves. Chinese officials last week offered hints that they are looking eventually to diversify China's foreign-exchange reserves. Over the next couple of years the dollar is likely to fall and bond yields rise as investors demand higher compensation for risk.

When house-price rises flatten off, and therefore the room for further equity withdrawal dries up, consumer spending will stumble. Given that consumer spending and residential construction have accounted for 90% of GDP growth in recent years, it is hard to see how this can occur without a sharp slowdown in the economy.

Alan Greenspan
Monetary myopia
http://www.economist.com/finance/displayStory.cfm?story_id=5381959


Borrowing from the future (chart)
http://www.economist.com.nyud.net:8090/images/20060114/CSF117.gif

Chart 2
http://www.economist.com.nyud.net:8090/images/20060114/CSF118.gif


And my favorite short-and-sweet summary article (which mirrors what I've been saying for MONTHS)
http://www.epi.org/content.cfm/pm110

[CoffeeCat]

12. If the growth in consumer spending is largely due to...

"increases in house prices and credit" then this means most spending is on borrowed money. It's not growth--people are just using their credit cards more and buying bigger houses.

Furthermore (and adding to the horror), I just read that 50 percent of all new home loans are INTEREST ONLY. People are buying more house than they can afford and banks are irresponsibly handing out loans that encourage irresponsibility.

If Bob and Sue buy a $500,000 home, but can't afford the payment--the bank gives them an interest-only loan and for the first 10 years, they only pay $1,200 per month. That $500,000 is added to the GDP. However, Bob and Sue can't afford that house. They aren't even paying for it! In ten years, when the loan payment doubles or triples, we'll see Bob and Sue in dire straights.

Irresponsible lending practices have overinflated growth numbers. The growth isn't real in many cases.

[PVK]

14. Except for this: Bob & Sue are planning to sell before then.

That's the theory behind interest only. The banks make out fine.

[Roland99]

15. Welcome to DU, PVK! ... Let's just hope Bob & Sue are able to hold out.

[converted_democrat]

25. And a couple years down the road there won't be anyone to sell to.

The housing market is already cooling.. What are the real chances that they will be able to sell, and break even a few years down the road? Slim to none.. and Slim just got on the fastest bus out of town.. How many other people are in that boat? Shit is about to hit the fan, it isn't a question of if, it's the question of when.

[elehhhhna]

29. If their loan goes upside down they'll just walk away.

[EVDebs]

27. More tax cuts for the wealthiest 1% .

Someone needs to tell the Supply Siders about that Keynesian term 'marginal propensity to consume' and how demand from the vast army of the poor and middle class (or soon to be poor, if Bush stays in office) primes the pump for economic growth. The poor and middle class actually spend the money they get. The wealthy put the money offshore (in investments geared to offshore even more mfg. jobs and now 'call center' white collar jobs even).

We need to get that money the rich and globalized corporations have squirreled away offshore put back into the US economy NOW.

[Roland99]

28. We're going to end up a cross between Argentina and Brazil

High real inflation and a great disparity in classes.

[Roland99]

16. Oh, and welcome to DU, Hestia!

[LittleClarkie]

7. I'm tired

I thought you were going to tell us the truth about General Discussion: Politics.

I never did trust that forum, you know.

If I wasn't at work, I'd be in bed right now.

Blah.

[CoffeeCat]

9. You don't like economics?

Bueller? Bueller?

[LittleClarkie]

11. Nearly flunked Macro in college

It doesn't like me.

[CoffeeCat]

13. I hear ya...

...although I liked micro 101 better than macro 101.

Intermediate micro nearly killed me though.

[Roland99]

17. Kick for the day crowd

[Darkhawk32]

18. So the only thing holding up our economy is borrowing money ...

from home equity? Home Equity Loans?

[MadHound]

19. Yup, more book cooking for those fine folks who brought you

Enron accounting practices!

And if you think that this little bit of accounting slight of hand is bad, let me tell you how they figure out the unemployment numbers.

Unemployment figures are derived from a poll, yes, that's right, a poll. It doesn't go by tax returns, unemployment claims, or any of the logical figures that one would think would go into compiling such a figure. Nope, the Bureau of Labor Statistics takes a poll every month. They call up 60,000 households, and ask the following questions of whoever answers the phone. "Do you work ten or more hours a week?" If the answer is yes, then a mark of "employed" is made, and the pollster says goodbye and moves on. If the answer is no, then the pollster asks if the person is actively looking for work. If the answer is yes, then a mark of "unemployed" is made, and the pollster moves on. If the answer is no, then the person isn't marked in any way, they are simply discounted and the pollster hangs up and moves on.

Now then, there are several problems with this. First, one of the first things to go when you're unemployed is your utilities, including your phone. Thus, how can a true number of unemployed be compiled from phone calls? Secondly, the poor are also less likely to have phones, thus their numbers are underrepresented. Third, the person who answers the phone may not be the bread winner in the house, and with an answer of unemployed, and not actively looking for work, this will again skew the numbers.

And then throw in such little nicities like Reagans decision to count the military as part of the labor force, and other political decision, you come up with figures that are completely divorced from reality, just like these GDP numbers, etc.

Welcome to the age of Enron accounting, where no number should be taken at face value.

Oh, one last little tidbit about the GDP. Fifteen percent of our annual GDP is going towards the interest payments on the national debt. Not the principle, just the interest. Sad, very sad. God help us all when this all blows up in our faces.:scared:

[Roland99]

22. And the book cooking isn't over.

The President's (Former) Economy Guru
http://www.npr.org/templates/story/story.php?storyId=5173072

Fresh Air from WHYY, January 26, 2006 · Economist Douglas Holtz-Eakin stepped down last fall as director of the Congressional Budget Office. He had been appointed to a four-year term that was to have ended in February of 2007.

During his tenure at the CBO, Holtz-Eakin also served as the office's representative on the Federal Accounting Standards Advisory Board.

Previously, Holtz-Eakin served as President Bush's chief economist. As director of the CBO, he earned a reputation for being fair and candid in discussing issues from tax rates to government spending.

The office is independent, nonpartisan and its main function is to estimate how much money the government should take in and spend each year. Holtz-Eakin is joining the staff of the Council on Foreign Relations. He has also been an academic economist at Columbia, Princeton, and Syracuse Universities.

Heard a bit of this at lunch today. Excellent interview (audio will be up in about 2 hrs). I esp. liked his comments that the budget cuts from Dec. (the whopping $40billion over 5 years) is just pennies and is meaningless. He also went to describe how this administration spun the estate tax proposal wildly, claiming farmers would lose their farms and, essentially, trying to spin from two different angles.

I only hope his replacement isn't some crony of the Propagandist that will be used to start cooking the books, right in time with the cessation of publishing M3.

[BR_Parkway]

30. On counting the military, i've been wondering - the reservists who

are overseas - since their job has to be held for them by law, but now they've been placed on active duty - are they being counted twice?

And if Shrub were to listen to Murtha et al and bring them home, what happens to his 'glorious' job increase numbers?

[Roland99]

34. Hmm...VERY good point. That's something worth researching.

[sundancekid]

20. while GDP and GDP w/out MEW typically look like 96-2000, it's blatantly

clear how much DISINFORMATION the busheviks pander out to the unknowing, uninformed, unwilling, and unable sops who don't happen to be brazillionaires ... OF COURSE, it points to reverse mortgages, taking equity out to stay alive or help with somebody's out of control credit card debts, or taking advantage of lower interest rates, but they are NOT putting that extra money back into the growth of real GDP

ever wondered what would happen to these pants-on-fire brigades if karma REALLY took over???
yup, I'm still lickin' my chops, while still:

:banghead:

[Roland99]

23. Pay no attention to the numbers behind the curtain.

[converted_democrat]

21. Holy shit, I knew it was bad, but I didn't know it was this bad...n/t

[Tierra_y_Libertad]

24. "There are lies, damned lies, and statistics". - Mark Twain

The gov't bookkeepers all must have got their experience while working for the Mafia.

[Roland99]

26. And the Current Account Picture isn't any better, either >>>>

http://www.epi.org/content.cfm/webfeat_econindicators_capict_20051216

The Bureau of Economic Analysis (BEA) announced today that the current account deficit (the broadest measure of the U.S. balance of trade in goods, services, and payments to the rest of the world) unexpectedly decreased to $783.3 billion, at an annual rate, in the third quarter of 2005, a decrease of $7.8 billion over the previous quarter. The U.S. deficit decreased to 6.2% of GDP, but this improvement in the deficit was entirely due to unexpected inflows of insurance payments and donations following Hurricanes Katrina and Rita. Without those payments, the deficit would have increased to more than $820 billion. The deficit is expected to increase in the future due to growing demand for petroleum products and consumer goods, and declining U.S. net investment income.

One of the most striking features of this report was revised data showed that net income from U.S. investments in the second quarter was negative for the first time in at least 45 years. It improved in the third quarter due to unusual variation in payments on foreign direct investment payments. However, rapidly growing payments to foreign holders of government securities will continue to exert downward pressure on net income from all U.S. investments in the future.

...

Chart - US Government Payments to Foreign Holders of Government Securities - 1980-2005
http://www.epi.org.nyud.net:8090/images/capict20051216.gif

Government interest payments rose from $74 billion in the third quarter of 2003 to $120 billion in the last quarter (at an annual rate). These payments are up sharply for two reasons. First, interest rates have been rising for the last two years. Second, foreign holdings of U.S. treasury securities have been growing rapidly. The current account deficit indicates that the United States is consuming about 6% more than it is producing. It needs to import about $2.2 billion per day in foreign capital to finance this deficit. As a result, the net U.S. international investment deficit reached $2.5 trillion in 2004. Foreign central banks and other private investors held $2.1 trillion in U.S. treasury securities alone at the end of the third quarter. Foreign central banks held the sizeable majority (63%) of that government debt.

...


As long as the U.S. maintains sizeable current account deficits, net borrowing and payments to foreign investors will continue to grow. The standard of living of future generations will be depressed by the need to pay for today's heavy borrowing from abroad.

Pretty soon we'll need fineprint on our currency: Owned By China.

[dchill]

43. fineprint on our currency: Owned By China

but it will be in Chinese. Lots of us thought that Reagan's first trillion dollar deficit spelled the end of the US economy. We were right, unfortunately. There is no way out of a hole that goes "all the way to China".

[Roland99]

57. A recent article implies "dark matter" means we have no curr. acct deficit

This article implies "dark matter" accounts for the discrepancies in the numbers and means the US is not a debtor nation.
http://www.economist.com/finance/displaystory.cfm?story_id=5408129

However, seems there are quite a few critics of Hausmann and Sturzenegger


http://www.tpmcafe.com/story/2006/1/2/21957/55873

December 16, 2005
Goldman Sachs Research
US Economics Analyst
Issue No: 05/50

"Dark Matter" in US International Transactions?

* Recently, Ricardo Hausmann and Federico Sturzenegger argued that the persistence of positive net investment income is prima facie evidence that the United States is not a net debtor. They claim that the balance of payments accounts overlook massive US exports of "dark matter"--in the form of knowledge, global liquidity, and insurance.
* We disagree, especially with their use of a constant P/E multiple to convert net income to net asset values, but they rightly point out that returns on US direct investment have consistently outpaced those on foreign counterparts. In recent years, lower interest rates and a falling dollar have helped as well, but with both currently moving the other way, the net income balance should deteriorate over the next year or two.


...


December 8, 2005
RGE Monitor

Emerging market bubble watch - and a word or two on dark matter

By Brad Setser

Setser is Head of Global Research and Senior Economist at Roubini Global Economics and a research associate at the Global Economic Governance Programme at University College, Oxford.

Four comments in response:

* The amount of "dark matter" on the US balance sheet is going to shrink rather rapidly. The US income balance went into deficit in the second quarter of 2005, and the income deficit (i.e. payments on US debts in excess of what the US earns on its external assets) may well reach $75b or so next year. Interest on the $800 billion in new debt the US took out in 2005 is part of the reason but also remember ...

* US interest rates were very, very, very low in 2002, 2003 and 2004 - unusually so. That had a thing or two to do with the positive US income balance during those years. From 2001 to 2003, the interest rate the US had to pay on its bank borrowing from abroad and the US interest rate that the US government had to pay on Treasuries held abroad fell substantially. That really helped to offset the rise in the US (gross) external debt associated with ongoing current account deficits. It won't help much longer. Interest rate differentials are no longer in the United States favor. Look for the US external interest bill to rise substantially in 2006 on the back of the Fed's tightening cycle.

* The same dynamics that have helped the US could also really hurt the US if they ever operated in reverse. US gross debt far exceeds US net debt. Gross US external liabilities are around 100% of US GDP. Big falls in the average cost of servicing all those liabilities have played a big role keeping net US payments down recently. If the US ever lost its ability to borrow from abroad at a very low rate (over the past few years, a falling rate), the overall impact on the US income position could be quite large. The interest bill on the United States gross debt could potentially go up by a lot. There is a big difference between say a 4% interest rate on gross debt of a 100% of GDP and a 6 or 7% interest rate on that much debt. At some point, a potentially very negative dynamic could set in. That is what worries me.

* Finally, generating new dark matter requires investing abroad, and, going forward, it is going to be hard for the US to both borrow to invest abroad and borrow to import so much more than the US exports. After all, judging from the reported return on foreign investment in the US, investing in the US is NOT the way to make a ton of money. Better to invest in Europe and try to find the secrets that generate all that dark matter for the US.


...


December 14, 2005 RGE Monitor

October Trade Data: Better try to find some more dark matter

By Brad Setser

It is pretty obvious that the US October trade deficit was quite large, even by recent American standards. Taking into account expected valuation changes (US assets in Europe are currently on the books at 1.35 dollars/ euro, but that will change when the end 2005 data is released) as well as the size of the US current account deficit, I suspect the US net external debt will approach $4 trillion/ 30% of US GDP by the end of this year - a bit faster than Bank of America seems to expect.

Large deficits are to be expected if a country produces less (at least less refined petroleum), exports less (I would assume that grain exports through the Mississippi are a bit below average) an still consumes more.

To me, the most interesting feature of the trade data is that non-petroleum imports are trending up once again. Think $144 billion in January, only $144-145 billion in August, $148 billion in September and $152.6 billion in October. Conversely, exports seem to have stalled, more or less, at around $106-$108 billion dollars. At a minimum, the pace of export growth seems to be slowing. This reverses the pattern of earlier this year, when monthly exports were heading up and monthly non-petroleum imports had stalled.

...

Call it the beginning of a trend. Or a step adjustment. But one way or another, the inventory correction that held down US imports for much of the first part of this year seems over. If you look at the real import and real export data in the BEA's report, they too seem to suggest a reversal. Real goods imports are rising again. Real goods exports seem to have stalled. (see p. 15 of the BEA release)

And I would not be surprised if the boost to US exports from a resurgent Boeing and the weak (end 2004) dollar is petering out. Don't discount the civilian aircraft sector - combine planes, parts and engines, and exports of aircraft and components are up by $8 billion so far this year. I am not sure a similar increase would be in the cards for next year even if the dollar has stayed at its end 2004 lows.


...


December 16, 2005 RGE Monitor

Is the world ready to finance a $1 trillion US current account deficit?

By Brad Setser

Judging from the capital inflow into the US in October, I guess the answer is yes. And I suspect the US may well give the world a chance to add $ 1 trillion to its dollar portfolio next year.

That may be a strange thing to argue after the US current account deficit (somewhat unexpectedly) fell in the third quarter. But the fall reflected a couple of one offs (Katrina related transfer payments, and some more dark matter) that I don't suspect will be sustained.

The third quarter current account deficit was only $195.8 billion, or $782.4 billion annualized. But the $196 b deficit reflects a $9 billion improvement in the US "transfers" deficit as European reinsurers made big payments to US insurers after Katrina and Rita. That alone cut the overall deficit by $9 billion. Add the $9 billion back in, and the overall deficit in the third quarter was about $205 billion, or $820 billion annualized.

...

Payments on US government debt held abroad rose by $2 billion, and other "private payments" rose by $7 billion. That is what one would expect. US policy rates are rising. US external debt is rising. That generally is a bad combination. But the US earned an extra $2.15 billion on its foreign direct investment abroad, and foreigners earned $4.1 billion less on their direct investment in the US. (Yep, the US continues to offer a raw deal to foreign companies operating in the US, at least judging from their reported income). Combine the two, and you get a $6.25 b fall in (net) income payments. Other US private receipts also increased by $5.6b, for reasons that elude me (interest rates outside the US were pretty low). This increase in US earnings abroad, along with the fall in payments on US FDI, allowed the income balance to improve in the third quarter.

I don't think that will last. If you take away the surge in FDI-related dark matter, the underling income balance deteriorated significantly.

[FloridaPat]

40. Military spending is in GDP too. Wonder what GDP would look like

without military spending too. This is way too scary. Good thing * has added 40% more dollars to the circulation since he's been in office.

[Roland99]

47. I need to find that chart I saw a week or so ago that shows sector gains

Seems like 80% of the gains were in energy and defense sectors.

[greiner3]

42. Snow, the wh's treasury secretary;

Looks like he couldn't get a job as a dog catcher (reference to nixon). He looks like he's on drugs most interviews and he is the one who puts forth all these reports! I've thought for several years that there will be a drop off in the GDP and b*** will blame it on the Dems.

[MissMillie]

44. I've checked this thread in both Netscape and IE

and I can't see the picture you're trying to post....

[Roland99]

46. Get the URL for the picture (right-click it and check the Properties)

Remove the "nyud.net:8090" from the URL and take the resulting string and paste it into your browser.

Or, go to the URL I posted in msg#5. :)

[redqueen]

50. Good God almighty...

:scared:

[stickdog]

51. Without refinancing and second mortgages, nobody's got a dime

to spend on consumer goods.

We live in a DEMAND-based economy, and the fact that the rich are taking all our money is killing the golden goose.

[FloridaPat]

55. And look at the crap people are buying! Plastic stuff from China.

99% of all this stuff in stores is not necessary for survival. Just "stuff". Grocery stores sell mostly processed food. Little nutrition. SUV's are basically more "stuff".

[dchill]

56. Plastic stuff from China...

via Walmart. Big-time Republican donors.

[Roland99]

59. One last kick to spread the truth!

[Roland99]

60. Economy Grows at Slowest Pace in 3 Years (quarterly growth)

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/27/AR2006012700482_pf.html

The economy grew at only a 1.1 percent annual rate in the fourth quarter of last year, the slowest pace in three years, amid belt-tightening by consumers facing spiraling energy costs.

Even with the feeble showing from October through December, the economy registered respectable overall growth of 3.5 percent for all of 2005 _ a year when business expansion was undermined by devastating Gulf Coast hurricanes.

...

The 1.1 percent growth rate in the fourth quarter marked a considerable loss of momentum from the third quarter's brisk 4.1 percent pace. The fourth-quarter's figure _ lower than the 2.8 percent pace economists were forecasting _ was the weakest performance since the final quarter of 2002, when the economy expanded at just a 0.2 percent rate.

The weakness in the final quarter of last year reflected consumers pulling back, cuts in government spending and businesses being more restrained in their capital spending.

Well, we know what makes up that 3.5% growth for the year, though, don't we?

[Roland99]

61. Where's the Job Growth coming from? Gov't Spending! (Military about 1/2)

Sluggish private job growth indicates failure of tax cuts
http://www.epi.org/content.cfm/webfeatures_snapshots_20060126

Changes in tax law since 2001 reduced federal government revenue by $870 billion through September 2005. Supporters of these tax cuts have touted them as great contributors to growth in jobs and pay. But, in reality, private-sector job growth since 2001 has been disappointing, and a closer look at the new jobs created shows that federal spending—not tax cuts—are responsible for the jobs created in the past five years.

If tax cuts have created jobs at all since 2001, it will have happened in the private sector. Assuming that job growth in 2006 matches the Bush Administration's projections, the economy will have added about 2.0 million jobs to the private sector from FY2001 through FY2006. But how many of these two million jobs actually can be attributed to tax cuts and how many to increased government spending—particularly increased defense spending—in this period?

Based on Defense Department estimates of the number of private-sector jobs created by its own spending, we project that additional defense spending will account for a 1.495 million gain in private sector jobs between FY2001 and FY2006. Furthermore, increases in non-defense discretionary spending since 2001 will have added yet another 1.325 million jobs in the private sector, for a total of 2.82 million jobs created by increased government spending. Increased mandatory government spending—which is not even included in these estimates or the accompanying chart—would account for even more job creation. The mere fact that the projected job growth resulting from increased defense and other government spending exceeds the actual number of jobs projected to be added to the economy through 2006 clearly indicates that the tax cuts hardly seem plausible as the engine of the modest job growth in the economy since 2001.

http://www.epi.org.nyud.net:8090/images/snap20050126.gif
(chart)


Well, well, well...

No wonder the chickenhawks want permanent war. It's the only way to sustain the economy!

:wow:

[earth mom]

62. So...Our economy is nothin but a "house" of cards....

but then, most of us knew that already....

Man, it will be ugly when it collapses.... :(

[Roland99]

63. And the cards aren't even ours.