Today’s shocking report that the U.S. economy actually shrank during the 4th quarter of 2012 shows just how fragile America’s economy “recovery” continues to be.
Some economists were quick to attribute the economy’s poor performance to “one time factors,” such as government spending cuts and slower inventory growth. But hold on – with a skyrocketing national debt, further government spending cuts should not be considered a “one time” event. Nor should slower inventory growth, which of course happens from time to time.
What’s really going on here?
The recovery from the 2008-2009 recession has been the most anemic of any in recent decades. In other words, we’re limping out of the hospital still badly wounded, not putting on our running shoes.
An economy with Reagan-era economic growth rates of 8% would be able to absorb such “one time factors” (which as we just discussed are not really one-time) without having the economy actually shrink. By contrast, the Obama “recovery” is so weak that the 2.6% which government spending cuts and slower inventory growth took away from GDP growth was enough to knock us back into negative growth.
This should be unacceptable to anyone genuinely interested in helping Americans get back to work.
Job growth doesn’t happen because politicians give speeches saying everything is fine, nor is it caused by government “jobs” programs that produce tiny numbers of temporary jobs. Real job growth in the private sector takes place when existing businesses cannot meet current and forseeable demand with their current workforce, and today’s numbers show that stronger demand is not coming any time soon.
Worse, we’re faced with the negative consequences of Obamacare on hiring. With an employer mandate that kicks in at 50 employees, you can bet that the vast majority of small businesses with 49 employees will hold back hiring until they need well more than 50 people. Under Obamacare few rational small business owner will have 50 or 51 employees.
Economic growth insufficient to prompt job growth, spiraling debt, and no interest in meaningful reform of entitlements. The Obama economic agenda continues to have the predictable effects, and that’s bad news for Americans. Contact Ron Nehring Ron Nehring on Facebook