James Pethokoukis relates Goldman Sachs's downgraded economic forecast:
Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8¾% at the end of 2012.Pethokoukis:
Alarms bells must be ringing all over Obamaland today. Unemployment on Election Day about where it is right now? Sputtering — if not stalling — economic growth? To many Americans that would sound like the car is back in the ditch — if it was ever out. Maybe Goldman is wrong, but economists across Wall Street have been growing more bearish.Answer: No way, no how. Steyn:
And recall that back in August of 2009, the White House — after having a half year to view the economy and its $800 billion stimulus response — made an astoundingly optimistic forecast. Starting in 2011, with Obamanomics fully in gear and the recession over, growth would take off. GDP would rise 4.3 percent in 2011, followed by … 4.3 percent growth in 2012 and 2013, too! And 2014? Another year of 4.0 percent growth. Off to the races, America. [. . .]
When will the White House signal a change of economic direction? Will cutting tax rates and regulation ever make it on the agenda? That may be the only way Obama can win another term. And time is running short.
Nothing good is going to come from these ludicrously protracted negotiations over laughably meaningless accounting sleights-of-hand scheduled to kick in circa 2020. All the charade does is confirm to prudent analysts around the world that the depraved ruling class of the United States cannot self-correct, and, indeed, has no desire to.Exactly. Try to imagine a scenario, however dire, in which the likes of Reid, Pelosi, and Obama embrace actual fiscal restraint. I can't do it. Can you?
And anyway, on Planet Obama, our problems aren't that serious, nothing that a little -- or even better, a lot -- more taxing and borrowing can't cure. Just some "modest adjustments." Yesterday he gave us the good news:
Here’s the good news: that it turns out we don’t have to do anything radical to solve this problem. Contrary to what some folks say that — we’re not Greece. You know, we’re not Portugal.No, we're not. When we go bottom-up it will be globally cataclysmic. Maybe that's what he meant when, in the same press conference, he forgot how "good" the news is and referred to "Armageddon" if the debt ceiling isn't raised. (Or maybe he was thinking about his reelection chances.)
Here's his analysis of what went wrong (hint: blaming Bush never gets old):
It turns out that our problem is we cut taxes without paying for them over the last decade. We ended up instituting new programs, like a prescription drug program for seniors that was not paid for. We fought two wars, we didn’t pay for them. We had a bad recession that required a Recovery Act and stimulus spending and helping states, accumulated, and there’s interest on top of that. And to unwind that, what’s required is that we roll back those tax cuts on the wealthiest individuals. That we clean up our tax codes so we’re not giving out a bunch of tax breaks to companies that don’t need them and are not creating jobs. We cut programs that we don’t need and we invest in those things that are gonna help us grow. And every commission that’s been out there has said the same thing and basically taken then same approach within the margin of error. So my general view is that if the American people looked at this they’d say, “Boy, some of the decisions are tough, but they don’t require us to gut Medicare or Social Security. They don’t require us to stop helping young people to go to college. They don’t require us to stop helping families who have a disabled child. They don’t require us to violate our obligation to our veterans. And they don’t require us to stop, quote/unquote, 'job-killing' tax cuts. They require us to make some modest adjustments to get out house in order. And we should do it now.” With respect to Senator McConnell’s plan, like I said, I think it is a ... it is constructed to say that if Washington operates as usual and can’t get anything done, let’s avert Armageddon.Meanwhile, Republican leaders embrace 'Cut, Cap and Balance' plan; vote set for next week. If they can't wrest the controls from the Democrats they can at least act like they tried.
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