The Commerce Department announced this morning that the Gross Domestic Product of the USA grew at an annualized rate of 0.1% in the fourth quarter of 2012. This is a revision from the earlier report that said the economy contracted at the rate of -0.1%. There will be two further revisions to this number, but it is unlikely that these later revisions will move the needle much. We now have conclusive evidence that the much vaunted "recovery" is actually total stagnation of the economy.
Remember, this stagnant economy came as the Federal Reserve was pumping funds into the economy at a rate of one trillion dollars per year through QE3. It also came even though the social security taxes, medicare taxes, income taxes and a whole host of Obamacare taxes were either lower or not even in effect yet. These tax changes are estimated to reduce the rate of growth by at least 1% (which would change the 0.1% rate to a decline of 0.9%, in other words a recession). On top of that we also have the dreaded sequester that will kick in and may reduce growth by as much as another half of one percent. All of this means that we may soon be seeing a return to recession in America.
And with the economy falling off a cliff, what is president Obama doing to rev up the engine of growth? The answer is clear: Obama wants to raise taxes further. To put it mildly, Obama's position is disgusting. In the Middle Ages, physicians used to attach leeches to patients to "bleed" them. These doctors thought that removing some of the diseased fluids from the body would help the healing process. The use of bleeding was totally counterproductive, but at least the doctors thought that they were helping and they meant well. Today, there are no economists who think that raising taxes will help spur economic growth. Indeed, Obama himself made the point repeatedly in 2010 that one cannot raise taxes when the economy is shaky without doing great harm. So today, Obama wants to use the medicine of higher taxes, but his goal is not to help spur growth. Obama cannot and does not believe that his tax plans will help the economy and the American people. One has to conclude that Obama does not even mean well. The only other choice is that Obama is psychotic.
Remember, this stagnant economy came as the Federal Reserve was pumping funds into the economy at a rate of one trillion dollars per year through QE3. It also came even though the social security taxes, medicare taxes, income taxes and a whole host of Obamacare taxes were either lower or not even in effect yet. These tax changes are estimated to reduce the rate of growth by at least 1% (which would change the 0.1% rate to a decline of 0.9%, in other words a recession). On top of that we also have the dreaded sequester that will kick in and may reduce growth by as much as another half of one percent. All of this means that we may soon be seeing a return to recession in America.
And with the economy falling off a cliff, what is president Obama doing to rev up the engine of growth? The answer is clear: Obama wants to raise taxes further. To put it mildly, Obama's position is disgusting. In the Middle Ages, physicians used to attach leeches to patients to "bleed" them. These doctors thought that removing some of the diseased fluids from the body would help the healing process. The use of bleeding was totally counterproductive, but at least the doctors thought that they were helping and they meant well. Today, there are no economists who think that raising taxes will help spur economic growth. Indeed, Obama himself made the point repeatedly in 2010 that one cannot raise taxes when the economy is shaky without doing great harm. So today, Obama wants to use the medicine of higher taxes, but his goal is not to help spur growth. Obama cannot and does not believe that his tax plans will help the economy and the American people. One has to conclude that Obama does not even mean well. The only other choice is that Obama is psychotic.
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