Initial measurement of GDP points to weak first quarter growth
No surprises here.
Housing and investment are dragging down the growth numbers, as expected, but so too is federal spending. (Take that Democrats who keep lying about the deficit.) Yep, reductions in federal spending make the nation's GDP growth go down. This is a good thing long term, of course. Once the budget is in balance there will be less pressure to "find revenue" to pay for things and no excuses not to make the Bush tax rate cuts (which helped enable this expansion) permanent.
There are other factors at play as well. High energy costs continue to be a threat. Where is Congress on this? The Democrats shot down the President's energy plan, so where is there plan? I guess they are too busy conducting witch hunts to actually govern.
If recent history is any guide the initial report of 1.3% growth will be revised upward to around 1.7% by the time of the final measurement. Still slow growth, though.
Do you think the Fed has realized by now that it's policy of "applying the brakes" went on far too long in previous quarters? They should have seen the underlying volatility in energy and housing and realized that higher growth was on its own unsustainable and not been so quick to increase rates.
I'd like to see a quarter point cut in rates at this point, coupled with a tightening of the money supply to prevent speculative borrowing. That should head off stagflation and energize investment.
Housing and investment are dragging down the growth numbers, as expected, but so too is federal spending. (Take that Democrats who keep lying about the deficit.) Yep, reductions in federal spending make the nation's GDP growth go down. This is a good thing long term, of course. Once the budget is in balance there will be less pressure to "find revenue" to pay for things and no excuses not to make the Bush tax rate cuts (which helped enable this expansion) permanent.
There are other factors at play as well. High energy costs continue to be a threat. Where is Congress on this? The Democrats shot down the President's energy plan, so where is there plan? I guess they are too busy conducting witch hunts to actually govern.
If recent history is any guide the initial report of 1.3% growth will be revised upward to around 1.7% by the time of the final measurement. Still slow growth, though.
Do you think the Fed has realized by now that it's policy of "applying the brakes" went on far too long in previous quarters? They should have seen the underlying volatility in energy and housing and realized that higher growth was on its own unsustainable and not been so quick to increase rates.
I'd like to see a quarter point cut in rates at this point, coupled with a tightening of the money supply to prevent speculative borrowing. That should head off stagflation and energize investment.