“GDP collapse puts U.S. economy into recession red zone”
Or rather, it makes it impossible to hide the fact that it’s long been there.
U.S. economic growth is dangerously slow. I’ve frequently written about research from the Fed which finds that since 1947, when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time. And when year-over-year real GDP growth falls below 2%, recession follows within a year 70% of the time.
Citigroup has also taken a shot at determining the stall speed: “Specifically, when U.S. growth has cut below 1½ percent on a rolling four-quarter basis, it has tended to fall by nearly 3 percentage points over the following four quarters, and the economy has typically entered recession.
Bottom line: Growth the past two quarters has averaged about 1.6%. Not only does this mean the economy is growing more slowly than last year’s 1.8%, it is also slow enough to signal about a 50% chance of a recession within a year. And the third quarter also looks weak.
The anemic, three-year-old U.S. recovery is already running out of steam. And if it does, it may be several more years before we see unemployment below 8%.
Prediction: if Obama is reelected, the post Jan 1 2013 tax shock will within a year effectively collapse the private sector economy, usher in buyouts of smaller competitors by connected corporate giants, create a perfect environment for coordinated crony capitalism, and lay the permanent foundations for the liberal fascist stopping point that always seems to block that one final turn down beautiful, bucolic Utopia lane.
– Which means the government will have to do more, and you will have to sacrifice more, to get us over that last “bump in the road.” Which, incidentally, is you as you.
All a scam. A depression is coming, and most of us continue to fiddle. Whether revolution or surrender follows in its wake of the sudden misery and confusion will depend, I guess, on whether or not the writing on “Burn Notice” continues to decline, or Honey Boo-Boo undergoes the kind of growth spurt that turns her from adorable saucy child into the precocious pre-teen who just got humped by a pageant judge in the back of an F2500.
Because really, who wants to watch that?