A cold wind blows across the USA this January. Word comes that the economy contracted in the 4th quarter of 2012 by .1%.
What? I thought we were on a slow but steady march upward. Maybe it’s just a statistical blip. Perhaps not.
Europe is solidly in recession, so is Japan. China might be, we don’t really know. Could the USA which has supposedly been in “recovery” be in for another leg down? We’ll see. We’ve bumped along the bottom for so long, maybe this is just another bump.
Much has been blamed on Defense cuts, but as the attached article points out, that’s not really the issue.
An interesting theory. Except that while the BEA says defense spending declined in Q4, overall federal spending was up $31 billion compared with Q4 2011 and up $98 billion compared with Q3 2012, according to monthly spending reports out of the Treasury Department.
And even assuming that the “huge cuts” from the sequester go through, spending this year will be about $570 billion higher than in 2008, and will consume 22.4% of GDP — a level reached only four times in the 63 years before Obama.
And Obamacare hasn’t even kicked in yet.