The U.S. economy is beginning to show signs of improvement, with many economists asserting the worst is past and data pointing to stronger-than-expected growth. On Tuesday, data showed manufacturing grew in August for the first time in more than a year. "There's a method to the madness. We're getting out of this," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
Much of the stimulus spending is just beginning to trickle through the economy, with spending expected to peak sometime later this year or in early 2010. The government has funneled about $60 billion of the $288 billion in promised tax cuts to U.S. households, while about $84 billion of the $499 billion in spending has been paid. About $200 billion has been promised to certain projects, such as infrastructure and energy projects.
Economists say the money out the door -- combined with the expectation of additional funds flowing soon -- is fueling growth above where it would have been without any government action.
Many forecasters say stimulus spending is adding two to three percentage points to economic growth in the second and third quarters, when measured at an annual rate. The impact in the second quarter, calculated by analyzing how the extra funds flowing into the economy boost consumption, investment and spending, helped slow the rate of decline and will lay the groundwork for positive growth in the third quarter -- something that seemed almost implausible just a few months ago. Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus.
I can tell you now that this news will be buried deep into the tar pit of Bobble heads' lost dreams and missing pens. I challenge the media to cover this. Will they? We'll see. All the idiot conservatives that said the stimulus failed have to eat their words because Rupert, the Overlord of their Universe has put it in his WSJ pages.
The recovery is still jobless thus far, which means it's not a real recovery yet. And the White House made two mistakes - one, they soft-pedaled the recession, claiming that unemployment would not go above 9% or so, leaving them susceptible to the charge that the stimulus isn't working; and two, they put far too much of the stimulus into tax cuts instead of the public investment that would have made it even more successful, particularly on the jobs front.
But without the public investment the stimulus has thus far provided and will continue to provide, we'd be mired in more negative growth and a near-depression.
1. Quitting when the going gets tough; abandoning the responsibility entrusted to you by your neighbors for book advances and to make money on the lecture circuit.
2. Bizarre move that will damn ambitions for higher office.
I bet when people saw Jade they were convinced that David Caruso was pullin' a Palin.
Please feel free to use this new term in a sentence in the open thread below...
