We’re not in a recession… yet. Technically.
WASHINGTON (AP) – The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down.
The country’s economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday.
Now, I’m no economist. I’ve only taken one economy class, that was last semester. I didn’t do as well in that as I would have liked. But it would seem to me that we’ve been getting some doom and gloom scenarios that aren’t true? Well, certainly not yet.
What troubles me, is that our government decides to react in one of the dumbest ways. (Yes, I know I’m late on this one, but I only started posting the 7th!)
The government’s $168 billion economic-stimulus package—including tax rebates that started flowing to bank accounts on Monday—should help energize the economy in the second half of this year, the Bush administration and Federal Reserve officials say.
What, pray tell, will this accomplish? Gas prices are high because demand outstrips supply. Same with food prices. A sudden boost in individual income will only exacerbate those issues. I’m sure when excess Wii’s, iPods, or Power Ranger action figures are sold that companies will recognize the reason they’re flying off the shelf is the recent stimulus package, not a legitimate boost in the economy.
So people get some stuff they normally wouldn’t get, corporations get money they normally wouldn’t get, and they’d have all of this and more if taxes were cut. All we will have accomplished is more debt, which we should have taken care of a long time ago.
The reason we are entering a recession is because of dumb business decisions, and the love this generation of Americans has for being in debt. If the majority uses this money to pay off their debts, then that would make it worth it, somewhat… ok not really.
But still, the reason the economy is contracting is because where we were heading was not feasible. We are living beyond our means, and the stimulus only enhances that.