WhatFinger


Facepalm.

Ouch: GDP grows only 0.1 percent in first quarter of 2014



Six months ago, the Obama White House was pretty excited to be able to tout GDP growth of 4.1 percent in the third quarter of 2013. That was followed by 2.6 percent in the fourth quarter, which is nothing to throw a party about but at least it's better than the annualized growth of less than 2 percent we've seen throughout Obama's bleak presidency. But you can't build an economic legacy on the occasional strong quarter. What this nation needs is sustained economic growth, preferably of 4 percent or better.
So how did we follow up that modestly respectable fourth quarter? Oof:
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.1 percent in the first quarter (that is, from the fourth quarter of 2013 to the first quarter of 2014), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6 percent. The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 5). The "second" estimate for the first quarter, based on more complete data, will be released on May 29, 2014.

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The increase in real GDP in the first quarter primarily reflected a positive contribution from personal consumption expenditures (PCE) that was partly offset by negative contributions from exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
Be sure to read that correctly. Not 1 percent, but 0.1 percent. This is what you get under policies that show no understanding of how you generate sustained economic growth. The approach of this White House is to try to regulate and manipulate the economy into some semblance of growth, and more importantly, to spend it into growth using Keynesian theories that say you can tax and spend the nation into prosperity using "multipliers" by which politicians wisely put public dollars in just the right place to spur economic activity. This does not work. It can occasionally manipulate the economy into a short-term spike, but it can't generate sustained growth. Look at the bumpy ride the economy has had the last couple of years:

Occasionally we break out into healthy-looking territory, but we can never sustain it because we have a government that is usurping far too much private-sector capital and running way too much debt, not to mention stunting the growth and earning potential of the private sector with heavy regulation and other policies that are blatantly hostile to business and profit. Ed Morrissey of Hot Air always has a thorough analysis of these numbers, and today is no exception:
That’s because we keep treating economic symptoms rather than stagnation’s causes. We add regulation where we should be eliminating it, we offer short-term incentives that end up subsidizing normal behavior, and our tax and regulatory policies keep capital sidelined. The massive expansion of hiring costs have employers looking to pare down, so consumers have less money to spend and less reason to take their own risks.
Precisely. Apparently the administration is already gearing up the "harsh winter" excuse, so we'll see how far they get with that. It's a good thing they're all going to take Nancy Pelosi's advice and run for re-election on ObamaCare! They sure as hell can't run on the economy.


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Dan Calabrese -- Bio and Archives

Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain

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