« 'Lone dove Danny' quits the MPC | Main | IMF: "Risks to financial stability have intensified" »

Tuesday, January 27, 2009

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341caf5253ef010536ff0687970c

Listed below are links to weblogs that reference CBO: largest growth shortfall since the Great Depression:

Comments

Arthur Eckart

Doses of reality:

The link below of key economic indicators shows the current recession is milder than the 1981-82 recession. This is the first severe recession since 1981-82 (which people forgotten or didn't live through) and there's no comparison to the Great Depression:

http://1.bp.blogspot.com/_otfwl2zc6Qc/SXJpb7gtIdI/AAAAAAAAI2o/TfwWkMoez4A/s1600-h/indicators.bmp

The second link shows the growth in world per-capita real GDP between 2002 and 2008 is one of the greatest periods of economic growth:

http://2.bp.blogspot.com/_otfwl2zc6Qc/STCkwME3I2I/AAAAAAAAH3c/ee8RtszfDt4/s1600-h/world.bmp

The real U.S. economy of the 2000s has generally been ignored, including the overabundance of real assets and goods, that raised household living standards at a steeper rate, substantially greater efficiencies of firms, in producing more output with fewer inputs, and the government borrowing almost for free. It's amazing there were enormous real improvements in the U.S. economy, that were greater than the 1990s, during a structural bear market that began in 2000, after the spectacular structural bull market from 1982-00.

Obamanomics: Creating a Suboptimal Economy

In the 2000s, it was wonderful to see uneducated Third World immigrants, who would have earned a few dollars a day in their home countries, if they could get a job, living in big houses, driving in almost new minivans or trucks, able to buy goods cheaply, etc. in the U.S., while 20% of U.S. households earned over $100,000 a year, e.g. in the high-tech industry. The U.S. created enormous capital (e.g. a record 20 consecutive quarters of double-digit U.S. corporate earnings growth) and there were massive foreign capital inflows. The U.S. had a virtuous cycle of consumption and investment. Cheaper goods and cheaper capital induced demand. Currently, Americans are stocked-up with real assets and goods to weather this recession better than any other country.

However, big change is coming. The new adminstration wants China to trade its goods for U.S. goods rather than for worth less paper. Also, the cost of domestic production will rise, because of hostile anti-business policies, which will raise prices and create less capital, resulting in less real output. Moreover, government will become a larger proportion of the U.S. economy, e.g. through the creation of "green-collar" jobs, and many other high-cost jobs. So, Americans will work harder and longer for fewer and smaller real assets and goods. The cost of living will rise in many ways, including through disincentives for productive workers and incentives for less productive workers and the unproductive. The government is now micromanaging the economy, since the free market has been a complete failure.

U.S. Economy Expanded 1.3% in 2008

To prevent an economic contraction in 2009 (currently, roughly a 2% contraction is projected in 2009):

1. Obama should change his stimulus plan to a $2,000 tax cut per worker (in the form of a tax holiday), along with increasing unemployment benefits by a similar amount. This will help households strengthen their balance sheets, i.e. catch-up on bills, pay-down debt, increase saving, spur consumption of assets and goods, etc. This plan will have an immediate and powerful effect to stimulate the economy. When excess assets and goods clear the market, production will increase.

2. Shift "toxic" assets into a "bad bank." The government should pay premiums for toxic assets to recapitalize the banking industry and eliminate the systemic problem caused by global imbalances. The Fed has the power to create money out of thin air, to generate nominal growth, boost "animal spirits," and inflate toxic assets.

3. Government expenditures should play a small role in the economic recovery. For example, instead of loans for the auto industry, the government should buy autos and give them away to government employees (e.g. a fringe benefit). So, automakers can continue to produce, instead of shutting down their plants for a month. Auto producers should take advantage of lower costs for raw materials and energy, and generate a multiplier effect in related industries.

pbr

It would be logical to look back and suggest that America is what has become by the innovation of a few, the wealth of a few, the commitment of a few - to its ongoing prosperity for all, but that would be disingenuous, to say the least.

For all of the commercial fame-enveloped grand promotions of marketing, America got where it is by the hard work and commitment of millions doing what Americans do every day - invest in itself. Every great country shares the panorama of such paragigms.

What took decades and centuries to develop, however, can be torn down in seconds by the wrong ideals, the wrong methods, and the wrong vision for America, as it can for any nation.

Being true to itself means understanding itself and trying not to be something it isn't, no matter how much glitz and glamour lie in wait for the few self-aggrandized among us who would destroy America for increasing their own self worth.

Many think this might be viewed as underestimating the economic climate and what it can produce; others imagine it as long term vision and common sense.

Economic policies that reward the few and disregard the many, and their aspirations, have always been doomed to failure throughout history, and offer the pleasures of short term glory at best. When can mankind get it right?

saç ekimi

Many think this might be viewed as underestimating the economic climate and what it can produce; others imagine it as long term vision and common sense.

girlteam

Det viktigaste kvalitets-, att tillfogar till ber�mmelsen av deals for phuket watches, �r dess peacefulness och rika civilisation. Al lado de la inversi�n la gerencia apropiada ayuda a Tailandia a conseguir la reputaci�n como lugar perfecto para viajar todo en todo el mundo.

panic attacks causes

You got a really useful blog I have been here reading for about an hour. I am a newbee and your success is very much an inspiration for me. Please come visit my site when you got time.
Thanks.

reduce cholesterol


Hello mate, I want to thank you for this nice blog. Would you mind telling me some secrets for a succesful blog ? Which could attract some visitors than it normally does. Please come visit my site cholesterol control when you got time.

Washington Business Directory

love your blog! Very cool! Please come visit my site Washington Business Directory when you got time.

neon tabela

ancak daha iyi ve ilginç konular anlamak ve gerekli detayları hakkında bilgi ..

Florist Singapore

This US trade thing baffled me

however if you want to find out more about how to lower cholesterol naturally, you can always visit the site.

St. Paul Yellow Page Business Directory

I can see that you are an expert at your field! I am launching a website soon, and your information will be very useful for me. Thanks for all your help and wishing you all the success in your business. Please come visit my site Business Directory St. Paul when you got time.

cell phone china

Ereli advice that, cheap cell phones and mobile phone users Internet users monthly income distribution of age, education.

Wichita Yellow Page Business Directory

You got a really useful blog I have been here reading for about an hour. I am a newbee and your success is very much an inspiration for me. Please come visit my site City Guide Wichita when you got time.

sexy video's

I can see that you are putting a lot of time and effort into your blog and detailed articles! I am deeply in love with every single piece of information you post here. Will be back often to read more updates! Please come visit my site sexy video's when you got time.

Fremont Yellow Page Business Directory

Can you provide more information on this? I am new to the subject. Please come visit my site Fremont Yellow Page Business Directory when you got time.

Glendale Phone Numbers

Can you provide more information on this? I am new to the subject. Please come visit my site Glendale Phone Numbers when you got time.

Jacksonville Phone Book

Yeah it is a great and nice article looking forward to have such article it is so useful. Please come visit my site Jacksonville Phone Book when you got time.

Texas  TX Phone Directory

I was thinking of looking up some of them newspaper websites, but am glad I came here instead. Although glad is not quite the right word… let me just say I needed this after the incessant chatter in the media, and am grateful to you for articulating something many of us are feeling - even from distant shores. Please come visit my site Texas TX Phone Directory when you got time.

laptop

great article. thanks for the useful informations.

rent a car

very nice informations thanks for the sharing.

acı cehre

very useful article thanks.

araç kiralama

Thanks for the informations they are too helpful for this subject

bilal

http://freedloadsiteall.blogspot.com/

Free download Lots of new games,new movies,softwares,and much more Plz visit this site
ITs All About U

Ibuy Logos

Say No to Slave Labour - No Sweatshops!

Join the Anti Nike Campaign Today

http://www.ibuylogos.com/store/2009/10/anti-nike-campaign/

Mesa Web Link

Awesome! I have read a lot on this topic, but you definitely give it a good vibe. This is a great post. Will be back to read more! Please come visit my site Mesa Web Link when you got time.

North Carolina NC Phone Directory

Such interesting read and information, thanks for sharing this post. I will check back to read your other new posts. Please come visit my site North Carolina NC Phone Directory when you got time.

Raleigh Phone Book

I'm glad you're back to posting. I love reading about your shopping adventures and great finds. Your outfits are always super cute too! Very inspirational. Please come visit my site Raleigh Business Search Engine when you got time.

sohbet

Being true to itself means understanding itself and trying not to be something it isn't, no matter how much glitz and glamour lie in wait for the few self-aggrandized among us who would destroy America for increasing their own self worth.

arman

Hello.I am an Iranian boy.I found your site in Iranian weblogs.I think your site is very good...
I have a weblog,too and it is about love.The language of my weblog is persian but it has a translator.I will be happy if you visit mine...
I am waiting you
HAPPY NEW YEAR
bye and have a good time...

Denver Business Directory Forum Blog Classifieds

I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future. Please come visit my site Denver Business Directory Forum Blog Classifiedsk when you got time.

Denver Business Search Engine

I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future. Please come visit my site Denver Business Search Enginek when you got time.

North Carolina NC Phone Directory

Wow, loving the two photos you posted. You got potential. Please come visit my site North Carolina NC Phone Directory when you got time.

Raleigh Phone Book

Wow, loving the two photos you posted. You got potential. Please come visit my site Raleigh Phone Book when you got time.

Giochi di Barbie

Giochi gratis barbie gioco

Forex Broker

Its quite astonishing how shear glutony can exist in our society today so undetected. This post makes for sombre reflective reading.

cheap r4 dsi

The key is to keep moving your money around where necessary. Not everyone knows it, but both T@sco and A&L allow you to open up new higher interest accounts without actually closing old ones so that when your bonus runs out or they introduce new higher interest accounts you needn't lose out. 3% is the minimum you should be getting right now.

I wouldn't completely agree savers are losing out. Certainly savers who have no mortgage or young people living rent-free with family are not. With RPI at -1.4% then that's effectively 4.4% which is actually close to the maximum return you would likely to get in rental on an average 160K property and you don't have the hassle factor.

ve19Kerry

Some students have lots of life problems but in spite of of that they should accomplish the expository essay. But at present they have not to worry about that, just because they will use your fantastic information related to this post as an example for academic writing. Other way, it seems to be affirmable to visit a buy essay service to order the academic research paper. Moreover, that’s really simple.

The comments to this entry are closed.

Information




  • TEST


  • Subscribe in NewsGator Online

Economist Weblogs

Disclaimer


  • This is a personal web site, produced in my own time and solely reflecting my personal opinions. Statements on this site do not represent the views or policies of my employer, past or present, or any other organisation with which I may be affiliated. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.