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.
As many observers have noted already, Democrats have effectively given up on trying to make the case for further government spending. The result has been bipartisan agreement to marginalize that argument to the point where it’s entirely vanished from the conversation. It’s only in this context that the bizarre bipartisan celebration of a deficit deal that managed to avert total implosion of the economy — while doing nothing to help solve the current problem with additional stimulus measures — makes any sense.
That both parties are asking us to view the current deal as an achievement, simply because it avoids the once-unimaginable prospect of default and total economic armageddon, only reveals the degree to which lawmakers, especially Democrats, have given up on making the case for sustained government action to help the economy. The bar has been lowered to the point where we are being asked to celebrate when government manages to narrowly avoid total economic disaster.
The government is the only sure-fire tool we have to ease unemployment and spark economic growth. Business sure isn’t doing it. They continue to downsize their work forces while banking record profits. This has been the product of a failed ideology that came to fruition under Reagan. As matter of fact let’s take a look at the big tax cutting Presidents and which ones had to raise the debt ceiling the most:
Reagan was the big tax cutter and he had to raise the debt ceiling by the most. Bush 41 was the second biggest tax cutter and also the second biggest raiser of the debt ceiling. Clinton wasn’t a tax cutter and he had the smallest increase. What’s that tell you?
We have a failed ideology leading this country right now. It wouldn’t be so bad if it wasn’t for the fact that our economy is already a major causality of this failed ideology and we are kicking those bad ideas into full gear now. The current debt deal risks raising taxes on the middle and lower class, while letting the people who have reaped the benefits of the American dream with little to contribute back to the country. To make matters even worse, we have a large portion of the American electorate that believes this is the right path. These are the people that allow the pundits on cable news and talk radio to dictate what they should thing. Those very same people pushing the ideas are the ones who always benefit the most from these piss-poor ideas. Rush Limbaugh? Look at the money he makes. He is in the top 1%, so those tax cuts save him all kinds of money.
Adding the misdirection of the American electorate into the current problems our nation faces, we are left with no light at the end of the tunnel, short of a total collapse of our economy that will rival the 1930’s.