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On the verge of recession: GDP growth drops to one percent

Bloomberg News reports that ‚??Goldman Sachs analysts led by Jan Hatzius cut their estimate for second-quarter gross domestic product growth to 1.1 percent from 1.3 percent, while Deutsche Bank‚??s chief U.S economist,¬†Joseph LaVorgna, reduced his forecast to 1 percent from 1.4 percent.‚?̬† (Emphases mine.)

Furthermore, ‚??Federal Reserve Bank of Kansas City President¬†Esther George¬†said yesterday the U.S. economy probably won‚??t grow much faster than 2 percent in¬†2012.‚?Ě

This led Bill Gross of Pacific Investment Management to predict the United States is ‚??approaching recession when measured by employment, retail sales, investment, and corporate profits.‚?̬† Retail sales were down 0.5 percent last month, as endless high unemployment suppresses household spending, with correspondingly brutal effects on retail sales.

This is all thought to be leading up to another round of quantitative easing by the U.S. Treasury ‚?? a strategy that didn‚??t work very well last time, and is likely to be even less effective in the face of Europe‚??s disintegration.¬† What‚??s the point of devaluing our currency when the Euro is on the verge of either massive devaluation or outright disintegration ‚?? to be replaced by a number of hyper-devalued local currencies?

Maybe it would be better to reduce our titanic government debt, coupled with a reduction in the tax burden on the private sector to expand it.¬† You can put more money in the hands of American consumers and entrepreneurs by either printing it in Washington, or taking it away from Washington.¬† We can reduce monetary pressure from our deficits by either making the private sector larger‚?¶ or making it smaller.

That doesn‚??t seem like a difficult decision, when we‚??re teetering on the edge of an outright recession, following a largely hypothetical ‚??recovery.‚?̬† As a prominent political figure once observed, ‚??you don‚??t raise taxes in a recession.‚?̬† Oh, wait, that was Barack Obama, and he‚??s the guy who can‚??t wait to raise taxes through the roof.¬† It‚??s all so confusing.¬† No wonder small business confidence just posted its largest decrease in two years, hitting the lowest level since October 2011.¬† The only thing we can be confident of, if we face four more years of Obama‚??s ruinous policies, is decline.

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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