Economy Contracts This Quarter

Partly based on less defense spending.

And Europe is even worse, the UK continues its recession and car sales in Europe are at a 17 year low.

Will Washington come up with a bipartisan stimulus plan? Somehow I don't think so.

Once again proving that when you cut government spending it is not good for the economy.

archer wrote: Once again proving that when you cut government spending it is not good for the economy.

It's also evident that the stock market is no longer a reflection of US economic health.

Personally I think the market is in need of a huge correction. With people not earning anything on interest bearing securities, they have no choice but to put it into the stock market inflating values.

archer wrote: Once again proving that when you cut government spending it is not good for the economy.

That does not look like any proof I have ever worked on.

My economy is expanding this quarter, by quite a bit, how about everyone else?

We are not all in the same ship, and if fact, many of us float closer to the top when others fail (think those that work for the govt right now - doing ok living off others getting poor). The subtle general state of the economy does not reflect what most people who have means, education, skills or ambition experience.

In fact, those that are not just stuck at some day job benefit from this unsettled atmosphere. When things are static and don't change, there is less opportunity poking out. These turbulent times have presented so many opportunities, I cannot believe it.

So if you were already a mover and a shaker and you did not over invest before, these are good times. Even if your boss is a mover and a shaker, you can ride those coat tails.

If everyone just keeps showing up, it will all work out.

My biggest concern, that the govt will just keep spending the money we already have allocated to help our families survive under this religion that if they spend, our life just gets better because they know how to spend it better than us (call this the Archer way). Just crazy, how could anyone admit that someone else knows how to spend their wealth better than they do, especially someone that does not even care about you or your future?

If that is proof, why is it so hard to convince Archer of other things?

Have to agree with OTN, there are going to be opportunities in any economy. For example, the company I work at has five divisions, two of them are doing very well, two of them are gasping for sales and one of them is slightly down.

For every homeowner grumbling about the lower value of their home is a buyer who believes they can finally afford to buy.

on that note wrote:

archer wrote: Once again proving that when you cut government spending it is not good for the economy.

That does not look like any proof I have ever worked on.

My economy is expanding this quarter, by quite a bit, how about everyone else?

We are not all in the same ship, and if fact, many of us float closer to the top when others fail (think those that work for the govt right now - doing ok living off others getting poor). The subtle general state of the economy does not reflect what most people who have means, education, skills or ambition experience.

In fact, those that are not just stuck at some day job benefit from this unsettled atmosphere. When things are static and don't change, there is less opportunity poking out. These turbulent times have presented so many opportunities, I cannot believe it.

So if you were already a mover and a shaker and you did not over invest before, these are good times. Even if your boss is a mover and a shaker, you can ride those coat tails.

If everyone just keeps showing up, it will all work out.

My biggest concern, that the govt will just keep spending the money we already have allocated to help our families survive under this religion that if they spend, our life just gets better because they know how to spend it better than us (call this the Archer way). Just crazy, how could anyone admit that someone else knows how to spend their wealth better than they do, especially someone that does not even care about you or your future?

If that is proof, why is it so hard to convince Archer of other things?

Not that I agree with what archer said, but I think she just said it as an anecdotal jab against those of us who think we cant's spend our way to economic growth. She knows (I think) that decreased defense spending has already been figured in a while back... Obama's troop withdrawl is pretty close to what Bush had planned.

It was not just an anecdotal jab, proved was probably too strong a word, but if you follow the economists you will find that many of them counsel against cutting government spending in a recovering economy.

Continuing with what Archer said, many believe the extended recession Britain is going through is because of the austerity measures they have implemented...but this begs the question, when do you start to wean the US economy off the goverment tit? When unemployment gets down to 5%? Or when total debt rises to 20 trillion?

Japan has been playing the stimulus game for decades and their economy hasn't shown much growth but debt levels are 200% of GDP.

Of course Government spending affects GDP, its right in the formula. Buy more paper clips!

GDP = private consumption + gross investment + government spending + (exports − imports), or

GDP = C + I + G + ( X - M )