Friday, July 27, 2012
There's really nothing surprising about the 2nd Quarter Economic Growth Report. It was expected to be bad and fall under 2%, there just isn't enough demand in the economy right now to produce the Consumer Spending. That we need to stimulate strong Economic Growth, people don't have the money to spend or don't feel good about spending whatever money they have to spend. Because of debt, or their mortgage, that they aren't sure how they are going to payoff or are worried about losing their jobs. Or have kids who are out of work or can't find a job or a combination of both, so when there's weak demand in the economy, there's weak Consumer Spending, which leads to weak Economic Growth. Which leads to weak Job Growth, because employers don't want to hire when there aren't a lot of customers out there to buy their products, so they end up not hiring and even laying people off. Which is a reason why we've had such weak Job Growth in the last few months, 2.2% Economic Growth from the first quarter falls to 1.5% Economic Growth in the 2nd quarter, with recent trend lines looking worse then they have been.
With Congress unable to do anything right now, besides past some things that they are suppose to pass by law. That just ten years ago seemed like Common Sense to both Democrats and Republicans like Highway bills, probably not much of a chance of them passing legislation. Designed to jump start the economy, doesn't mean they can't and doesn't mean they shouldn't but both parties have most of their focus if not entire focus on the General Elections. The Federal Reserve is really the only game around anywhere, not just in Washington thats in position to stimulating Economic Growth, with their access to the currency. And they are meeting next week to discuss and hopefully pass something that can stimulate the economy next week. Whatever they'll do will probably help but Congress both the House and Senate should come together and pass some type of Economic Growth bill but they won't.
I would like to see Congress pass an Economic Recovery Act, as I would call it, thats built around Infrastructure Investment, Energy Policy like new drilling and other Energy Investments. And some finality with the Bush Tax Cuts like extending all of them right now. To get some predictability in the economy so business's and individuals know how their taxes are going to look in the future.