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Government spending could use a recession

May 20, 2008
TIMES-REPUBLICAN
There is no doubt that the U.S. economy is in a slowdown, but it has not become a recession, according to a report released last week. That is good news, of course — but one of the “bright spots” in the report is troubling.


According to the Commerce Department, the nation’s gross domestic product  grew at an annualized rate of sixth-tenths of a percent during the first quarter of this year. Because GDP is among the most important indicators, that means the economy has not entered a recession.


That’s the good news.


The bad news is that one of the “stars” of the economy during the first quarter was — you guessed it — government. Spending by government agencies increased at an annualized rate of 2 percent during the first three months of the year — more than three times the rate for the economy as a whole.


Money Americans send to Washington through various taxes could be spent in the private sector, boosting that area of the economy. And, of course, deficit spending is a drag on the economy.


Come to think of it, a “recession” of sorts, in government spending, might not be a bad thing.   
 
 

 

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