Signs are pointing to us entering the dreaded double-dip recession:
Friday's news on GDP shows the double dip has arrived — an expansion of only 1.3 percent and consumer spending up 0.1 percent in the second quarter. Astonishingly low by any account. The debt ceiling trouble and lack of a longer term resolution to the deficit will make it worse.
The U.S. has entered a second recession. It may not be as bad as the first. Economists say that the Great Recession began in December 2007 and lasted until July 2009. That may be the way that the economy was seen through the eyes of experts, but many Americans do not believe that the 2008-2009 downturn ever ended. A Gallup poll released in April found that 29 percent of those queried thought the economy was in a “depression” and 26 percent said that the original recession had persisted into 2011.
And with unemployment inching higher again, the economic future of this country is in peril.
Sounds pretty bad - huh? Well it doesn't get any better. There was only one other point in time when the government cut spending during such economic turmoil was during the great depression. Those cuts made the depression far worse and things didn't turn around until the government started pumping out more money. The new debt deal promises to revisit this horrible mistake in our history. From Greg Sargent:
One way to understand the debt ceiling deal that passed the House last night and will almost certainly pass the Senate today is this: It represents the current bipartisan capitulation on the idea that government can do anything to create jobs and fix the economy taken to its logical and ultimate conclusion.