GDP Growth Slows to Crawl, But Austerity Cuts Still All the Rage
April 28, 2011
(ChattahBox Business News)— The U.S. Department of Commerce released its first quarter report on our nation’s Gross Domestic Product growth, and it doesn’t look good. Our economy only managed a meager 1.8 percent increase in GDP growth. This is a significant decline, compared to the encouraging 3.1 percent GDP growth in the fourth quarter of last year. Economists blame the decrease on draconian budget cuts, higher prices for food and gas, combined with higher imports and slowed construction. Many of these factors are expected to improve, but Republican Congressional lawmakers, on a deficit reduction binge, plan to continue starving our sluggish economy.
The GDP report, prepared by the Bureau of Economic Analysis, points out that the economy was held back by “negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.”
Federal Reserve chairman, Ben Bernanke, attributes the slow economic growth to transitory factors that should ease up for the second quarter, according to The New York Times.
“Most of the slowdown in the first quarter is viewed by the committee as being transitory,” Mr. Bernanke said, referring to the opinions of the Fed’s Federal Open Market Committee, which sets interest rates. “That being said, we’ve taken our forecast down just a bit, taking into account factors like weaker construction and possibly just a bit less momentum in the economy.”
Still, the higher prices for necessities could continue to drag down the economy.
“Of these various obstacles, the biggest concern going forward is higher commodity prices, which reduce the amount of pocket money that households and businesses have available to spend on other purchases. Gasoline prices began to rise midway through the last quarter and have shown little sign of falling in recent weeks.”
On a brighter note, the employment numbers continue to increase, but a long-term decrease in GDP growth could eventually weaken employment.
This report shows an economy that’s still fragile, and still struggling to recover from one of the worst economic downturns, since the Great Depression. But all we hear in Washington is cut, cut, cut, when we should be hearing, jobs, jobs, jobs and plans for more economic stimulus spending.
Don’t count on that happening any time soon. The Radical Ayn Randian ideology of the GOP is dominating our public policy. And Republicans have an incentive to institute measures to make our economy worse leading into the 2012 presidential elections.