RatcliffeBlog - Mitch Thinking Out Loud

Hokay, we got us a...

Hokay, we got us a slow economy

So, the U.S. economy grew at a rate of only 1.6 percent in the first quarter and unemployment filings continue at 10-year highs. Low interest rates haven't helped and it's worse elsewhere, meaning that the export of U.S. goods and services is likely to remain depressed. From Reuters this cheery chart:

                     Q1-A   Q4-F     Q3   2002
Services              0.5    2.2    2.3    2.2
Business Investment     -4.2    2.3   -0.8   -5.7
Structures             -3.4   -9.9  -21.4  -16.4
Equipment/software     -4.4    6.2    6.7   -1.7
Housing Investment      12.0    9.4    1.1    3.9
Exports                 -3.2   -5.8    4.6   -1.6
Imports                 -7.9    7.4    3.3    3.7
Government Purchases     0.9    4.6    2.9    4.4
Federal                 2.6   11.0    4.3    7.5
State and Local        -0.1    1.2    2.2    2.8
A-Advance (1st estimate). P-Preliminary (2nd). F-final (3rd.)
Seasonally adjusted annual rates, in blns of '96 chain dlrs:

All the growth is due to increased government spending, and mostly on arms. Now, the question is whether there is any hope of renewed investment in a tax cut and I'd argue that if money is as cheap as it is today, lowering the risk of investing personally in one's own business, and that still hasn't helped, the Bush tax cut is only going to increase short-term wealth among a small number of families at the expense of future generations that will be saddled with the debt we're buying now.