The Republican Plan to push us into Depression is succeeding. And the errors of the past by Democrats are coming home to roost.
The nation's gross domestic product expanded at a pitiful seasonally adjusted annual rate of 1.3 percent in the second quarter that ended June 30, the Department of Commerce reported today. This was a good deal worse than most experts had predicted for the period. In addition, first-quarter growth was revised from 1.9 percent to 0.4 percent, All in all, very bad news.
Meteor Blades: Kee-runch. At 1.3% growth, second-quarter GDP report reeks even worse than experts predicted+*
Krugman identifies a main cause: cutting federal, state, and local government spending:
What’s causing the stagnation? A big factor is falling government spending: “government consumption and investment spending” has been falling sharply as the stimulus runs out and state and local governments slash. Anyone talking about fiscal austerity should know that in practice we’re already doing it, with the usual results.
So given a stagnant economy suffering from falling government spending, what is all our political debate about? Spending cuts!
Paul Krugman: Stagnation Nation
So far most of the "deficit bills" are back-loaded, with severe cuts more than two years out, but we may not even be able to afford even those early relatively smaller cuts. Add them to severe cuts in the states and we are facing a double dip.
And the debt ceiling crisis is exacerbating everything.
Meanwhile, Boehner flails while the Teahadist cheer on the coming harder times.
It is a class war. And our side has been getting shafted for a long time.
Time to fight back.