WASHINGTON -- In its first report on the depressed final three months of 2008, the U.S. Commerce Department says gross domestic product shrank at a 3.8 percent annual rate.
WASHINGTON -- In its first report on the depressed final three months of 2008, the U.S. Commerce Department says gross domestic product shrank at a 3.8 percent annual rate.
Source: VOA
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By all accounts, the nation's economic downturn is deepening.
The Commerce Department reveals that consumers are cutting back on purchasing and paying off debt. Businesses are similarly cutting back and as commerce slows retailers and manufacturers are laying off workers.
The 3.8 percent decline follows a more modest five tenths of one percent contraction in the third quarter. It was the first back-to-back quarterly decline since 2001. For all of 2008 the U.S. economy grew by 1.3 percent. Negative growth of two percent in predicted for 2009.
While some analysts had expected a steeper five percent decline in GDP, the growing number of layoffs is causing the greatest concern. Over half a million Americans lost their jobs in December, bringing the 2008 total to 2.6 million lost jobs. The pace of layoffs is continuing.
Jim Paulson, a money manager in Minneapolis, is skeptical that the $800 billion stimulus program working its way through Congress will have the intended result. He favors more tax incentives to create jobs.
"I'd rather see us treat the confidence of the healthy players that have just shut down because they're scared, as opposed to keep trying to treat the impaired players - like trying to treat unemployment or foreclosures. The best thing we can do for that problem is to get healthy players spending again, through confidence," he said.
President Obama's fiscal stimulative program is heavily weighted towards increases in government spending, to stimulate economic activity. The government's budget deficit is at record levels and is expected to rise further. Official interest rates are at record lows. But despite all these measures, economic activity has not yet recovered.
Leonidas, you are 100% right but I don't know what the answer is, there has to be a balance between govt controls and free marketing.
The financial industry must be more heavily regulated without being under total control of any government.
Paul/UK your analogy is totally wrong.
The China, Russia, US relationship is more triangular. China and the US have a lot of economic dependence but at a distance. China is not eager to slide to the position of Russia's queen anymore than to the US. It will continue to be a free thinker and make its own decisions, without allowing itself to be put in the situation where someone else is calling the shots.
In a chess game the queen is worthless without the King, while the King is damaged but survies without the Queen. This is not your China-Russia relationship
(pss, 1 February 2009 09:16)
As the English would say, "Pride comes before a fall".
(lowe, 31 January 2009 12:35)
"So you are saying that Russia is about to fall?
(Slipknot, 31 January 2009 14:45)"
I think it would be pretty obvious to anyone with an iota of common sense that I was not referring to the Russians in my post.
(lowe, 1 February 2009 05:47)
PSS has touched upon an important point which is failure of the Obama administration to solve this recession will have severe consequences all over the world.Countries with weak economic and social infrastructures will suffer immensely.
However, i have my doubts as to whether any economic stimulus without caveats will
stop the world recession from
turning into depression.
We need a new financial system which will be based upon the production of real goods and services and not based on the present speculative whirlpool.
Therefore,new financial institutions will be required
to meet the needs of the world population at large and not the needs of the world bankers.
In the meantime we are seriously f..... and the next few years could be very ugly indeed.
(Leonidas, 31 January 2009 21:59)
Let's face it... the world is just one big game of chess... Russia the King on ones side with it's Queen China... and the USA on the other side with the UK as it's Queen/Puppet!!
(PaulUK, 31 January 2009 21:23)
Don't know how far US will fall, but to all those who are hoping for the worst, just remember it is going to hit smaller countries about 100 times harder.
The world is different today, we are a global economy. example Russia was getting $150 a barrel for oil last summer but due to the world economics they are getting less than 40 today.
So for anyone hoping to see the US on their knees in this time remember they will probably be kneeling on the heads of countries with fledgling economies.
Be careful what you wish for.
(pss, 31 January 2009 17:04)
PSS has touched upon an important point which is failure of the Obama administration to solve this recession will have severe consequences all over the world.Countries with weak economic and social infrastructures will suffer immensely.
However, i have my doubts as to whether any economic stimulus without caveats will
stop the world recession from
turning into depression.
We need a new financial system which will be based upon the production of real goods and services and not based on the present speculative whirlpool.
Therefore,new financial institutions will be required
to meet the needs of the world population at large and not the needs of the world bankers.
In the meantime we are seriously f..... and the next few years could be very ugly indeed.
(Leonidas, 31 January 2009 21:59)
Don't know how far US will fall, but to all those who are hoping for the worst, just remember it is going to hit smaller countries about 100 times harder.
The world is different today, we are a global economy. example Russia was getting $150 a barrel for oil last summer but due to the world economics they are getting less than 40 today.
So for anyone hoping to see the US on their knees in this time remember they will probably be kneeling on the heads of countries with fledgling economies.
Be careful what you wish for.
(pss, 31 January 2009 17:04)
Let's face it... the world is just one big game of chess... Russia the King on ones side with it's Queen China... and the USA on the other side with the UK as it's Queen/Puppet!!
(PaulUK, 31 January 2009 21:23)
As the English would say, "Pride comes before a fall".
(lowe, 31 January 2009 12:35)
"So you are saying that Russia is about to fall?
(Slipknot, 31 January 2009 14:45)"
I think it would be pretty obvious to anyone with an iota of common sense that I was not referring to the Russians in my post.
(lowe, 1 February 2009 05:47)
Leonidas, you are 100% right but I don't know what the answer is, there has to be a balance between govt controls and free marketing.
The financial industry must be more heavily regulated without being under total control of any government.
Paul/UK your analogy is totally wrong.
The China, Russia, US relationship is more triangular. China and the US have a lot of economic dependence but at a distance. China is not eager to slide to the position of Russia's queen anymore than to the US. It will continue to be a free thinker and make its own decisions, without allowing itself to be put in the situation where someone else is calling the shots.
In a chess game the queen is worthless without the King, while the King is damaged but survies without the Queen. This is not your China-Russia relationship
(pss, 1 February 2009 09:16)
Don't know how far US will fall, but to all those who are hoping for the worst, just remember it is going to hit smaller countries about 100 times harder.
The world is different today, we are a global economy. example Russia was getting $150 a barrel for oil last summer but due to the world economics they are getting less than 40 today.
So for anyone hoping to see the US on their knees in this time remember they will probably be kneeling on the heads of countries with fledgling economies.
Be careful what you wish for.
(pss, 31 January 2009 17:04)
Leonidas, you are 100% right but I don't know what the answer is, there has to be a balance between govt controls and free marketing.
The financial industry must be more heavily regulated without being under total control of any government.
Paul/UK your analogy is totally wrong.
The China, Russia, US relationship is more triangular. China and the US have a lot of economic dependence but at a distance. China is not eager to slide to the position of Russia's queen anymore than to the US. It will continue to be a free thinker and make its own decisions, without allowing itself to be put in the situation where someone else is calling the shots.
In a chess game the queen is worthless without the King, while the King is damaged but survies without the Queen. This is not your China-Russia relationship
(pss, 1 February 2009 09:16)
Let's face it... the world is just one big game of chess... Russia the King on ones side with it's Queen China... and the USA on the other side with the UK as it's Queen/Puppet!!
(PaulUK, 31 January 2009 21:23)
As the English would say, "Pride comes before a fall".
(lowe, 31 January 2009 12:35)
"So you are saying that Russia is about to fall?
(Slipknot, 31 January 2009 14:45)"
I think it would be pretty obvious to anyone with an iota of common sense that I was not referring to the Russians in my post.
(lowe, 1 February 2009 05:47)
PSS has touched upon an important point which is failure of the Obama administration to solve this recession will have severe consequences all over the world.Countries with weak economic and social infrastructures will suffer immensely.
However, i have my doubts as to whether any economic stimulus without caveats will
stop the world recession from
turning into depression.
We need a new financial system which will be based upon the production of real goods and services and not based on the present speculative whirlpool.
Therefore,new financial institutions will be required
to meet the needs of the world population at large and not the needs of the world bankers.
In the meantime we are seriously f..... and the next few years could be very ugly indeed.
(Leonidas, 31 January 2009 21:59)