Another ‘who woulda thunk it’ moment:
The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.
The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.
Get outta here! You mean with businesses fretting over the unknown cost of ObamaCare, with taxes being raised for almost every American, and government spending continuing to spiral out of control that our economy is contracting?
But wait…the White House says it’s all the Republicans fault:
White House press secretary Jay Carney laid the blame for a surprise economic contraction squarely at the feet of congressional Republicans Wednesday, saying economic threats during the “fiscal cliff” negotiations had prevented important defense spending.
“Our economy is facing a major headwinds, and that’s Republicans in Congress,” Carney said.
The Commerce Department projected Wednesday that the nation’s gross domestic product (GDP) shrank by 0.1 percent in the fourth quarter of 2012.
Carney said that was partially attributable to the threat of sequestration, which would implement across-the-board spending cuts if a long-term deficit deal is not reached.
“This is political brinkmanship that results in one primary victim. That’s American taxpayers and the American middle class,” Carney said, acknowledging the GDP projection was bad news.
The American taxpayers and the middle class are already victims having had their taxes raised.
And whose idea was sequestration anyway?
Yup, the White House.
It’s kinda funny how when the economy shows improvements Obama is very quick to take credit. When it’s bad he’s quick to blame everybody but himself and Democrats are right there with him. Charles Krauthammer:
Lets imagine for a moment that Romney had won the election and news like this came out…you think the media and the Democrats would be shrugging their shoulders?
Humanity has an innate attraction to conspiracy and complexity. Humans have been selected to seek patterns in Nature and in the behavior of the humans around them. No wonder humans are drawn to detective stories, puzzles and conspiracies.
While conspiracies are indeed a part of the human experience, focusing on human intent and collusion can distract us from the impersonal systems that dominate economic history.
In a similar fashion, an obsession with complexity distracts us from what is blindingly obvious. Just as the alcoholic refuses to admit his addiction lest he be forced to tackle his self-destruction, so too do we avoid the financially obvious lest we be forced to surrender our ardent hope that the increasingly fragile Status Quo we depend on is enduring and secure.
As long as the interest rate on debt is low, the path of least resistance is to keep borrowing to support politically untouchable fiefdoms, cartels and constituencies. Eventually, the cost of servicing the debt overwhelms the diminishing returns on the debt-based spending.