Monday, 29 April 2013
Robert Reich offers a half decent and sobering assessment of the American economy going forward (much better than any other mainstream assessment)
Posted on 07:47 by Unknown
http://www.huffingtonpost.com/robert-reich/earth-to-washington-repea_b_3165189.html
He is absolutely right to highlight the sizeable drop in the savings rate - the consumer is tapped out.
By far the largest part of the recent sizeable drop in consumer confidence is in FUTURE expectations.
Robert Reich neglects to mention that the sequester is for a trivial amount.
He offered a much better assessment in December when he correctly called for dramatic cuts in Corporate Welfare and military spending.
Corporate profits are at record levels.
So is poverty.
The balance needs to be urgently addressed.
Like cutting Corporate Welfare and military spending by over $1.3tn a year and using the money for massive tax cuts for middle earners and below, to increase disposable incomes and get bottom up spending going again.
As Robert Reich says - disposable incomes for the 99% continue to plummet.
According to Goldman Sachs the 1st qtr reported GDP growth is very significantly inflated with one offs that will either not happen or be reversed in the 2nd qtr.
1% is due to an increase in inventories - won't happen in Q2
The reported consumer spending "increase" is largely due to seasonal adjustments and will be reversed for Q2
Goldman over estimated reported Q1 GDP by 0.7% - they were expecting 3.2%.
But that's mainstream economists for you.
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