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In reply to the discussion: US economy shrinks 0.1 pct., 1st time in 3 ½ years [View all]pampango
(24,692 posts)49. Krugman: Most analysts are, rightly, shrugging off the surprise report of an actual decline in 4th
quarter GDP.
Most analysts are, rightly, shrugging off the surprise report of an actual decline in 4th quarter GDP. It will probably be revised away, and in any case its the result of one-off factors: a drop in inventories and a quirky sharp decline in defense spending.
Still, the report does highlight the role that shrinking government purchases of goods and services are playing in holding the economy back. And yes, I mean shrinking, not just growing more slowly than Id like. Transfer payments like Medicare and Social Security are rising (although unemployment benefits are falling), but government purchases of stuff mostly at the state and local level, where the stuff in question includes hiring schoolteachers has been in fairly rapid decline.
Heres a comparison, using the BEA numbers, of the relevant numbers in the current business cycle and during the Bush-era recession and aftermath:
So fiscal austerity is the difference between where we are now and an unemployment rate not much above 6 percent. Its a policy disaster.
http://krugman.blogs.nytimes.com/2013/02/01/our-incredible-shrinking-government/
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The national GDP shrank (did not grow). Most economists consider that a proxy
coalition_unwilling
Jan 2013
#2
Also means a lot fewer highly (over) paid defense contractors making bank on egregious profit margin
Roland99
Jan 2013
#3
Great point! If one favors a decrease in defense spending, as most of us do, this is good news. If
pampango
Jan 2013
#15
If the non-defense segment of the economy expanded and the defense segment contracted, that is good
pampango
Jan 2013
#25
It meets my definition of 'good news', if the alternative is continuing high defense spending
pampango
Jan 2013
#34
But the shrinking is necessary if other areas of the economy are to grow, become
JDPriestly
Jan 2013
#38
The economy is still on life support, and any cuts in gov't spending are going to hurt.
reformist2
Jan 2013
#9
When Krugman, Stiglitz, and reality-based economists are derided by Democratic leadership...
MannyGoldstein
Jan 2013
#12
Yeah, the economist in me takes issue with the term 'depression,' as that
coalition_unwilling
Jan 2013
#24
Agreed. All that money invested in all that production which either kills people including
JDPriestly
Jan 2013
#40
So, why aren't we building fast rail and installing solar panels on more houses in Southern
JDPriestly
Jan 2013
#41
It may be a 'one off' but when combined with December's precipitous
coalition_unwilling
Jan 2013
#28
Your headline is somewhat misleading (or has the potential to be), as U.S. GDP
coalition_unwilling
Jan 2013
#48
I believe that the global historic peak in oil production is at the root of our economic woes ...
brett_jv
Jan 2013
#30
While I feel inclined to agree with you, I also must point out that the
coalition_unwilling
Jan 2013
#31
Agreed. I remember my dad pulling into the filling station and paying 25 cents a gallon.
JDPriestly
Jan 2013
#44
The increased payroll tax will go directly into the Social Security Trust Fund and be loaned to the
JDPriestly
Jan 2013
#45
The slight increase in consumer spending suggests to me that the private sector is less
JDPriestly
Jan 2013
#46
Krugman: Most analysts are, rightly, shrugging off the surprise report of an actual decline in 4th
pampango
Feb 2013
#49
Thanks for posting. BLS just posted January 2013 payroll #s, and unemployment
coalition_unwilling
Feb 2013
#50