Skip to comments.U.S. Growth May Hinge on Businesses (NYT: US Economy Flirts With Quagmire)
Posted on 12/30/2005 12:02:54 PM PST by presidio9
The housing market is gradually fading as a prop for the economy, eroding a source of increased wealth that allowed consumers to borrow and spend avidly in recent years.
Growing Stronger Meanwhile, the bond market, where short-term interest rates are now slightly above long-term rates in what is known as an inverted yield curve, suggests that the economy is headed for a sharp slowdown, perhaps even a recession. The stock market rally earlier this year has petered out.
So why do most forecasters predict that economic growth will remain relatively strong next year? Perhaps because they are counting on other sectors that have been relatively weak - particularly stepped-up business investment - to help sustain the robust expansion of the last 30 months.
"I think the surprise will be that housing prices and housing sales will decelerate, but the economy will do just fine," said Richard Berner, chief domestic economist for Morgan Stanley.
Mr. Berner is not alone in his optimism. Despite some worrisome indicators, only a handful of the 53 economists surveyed by Blue Chip Economic Indicators predict that the growth rate in 2006 will drop much below the 3.7 percent average so far this year.
That outlook also assumes that consumer spending, deprived of the lift from rising home prices and mortgage refinancing, will not drop very much.
Despite high debt levels, it is still safe to say that Americans will somehow continue to buy on credit, and with energy prices falling, wages now diverted to gasoline purchases should be freed up to spend on the array of goods and services that drives the economy.
Forecasters are notorious for missing major turning points in the economy.
(Excerpt) Read more at nytimes.com ...
Only those employed by the NY DNC Times and other Dinosaur Media outlets
Dubya needs to push another tax cut. Not because we really need it, but just to piss the liberals off.
But according to the NY Times, the economy hasn't been good under Bush. I guess they will revise that meme only if the economy actually starts to stagnate. Then they will tell us the economy was good, but faltered under Bush's leadership even though they've never admitted it was good.
"U.S. Growth may hinge on Businesses"
Kinda makes you want to say, "as opposed to...?" doesn't it?
The one thing that can't be argued is that many Americans are absolutely swimming in debt. That is the only thing that scares me in today's economy.
How did this slip in?
And acroos town, the Wall Street Journal says:
Actually, US economic growth under Bush has been almost the same as it was under Clinton, even before you factor in 9/11 and Katrina. And unemployment is lower. In fairness, the Times has never referred to "growth" under Clinton. In it's pages, it is always "RECORD growth."
The country as a whole is prospering. The 'wage loss' is in the dinosaur media. Less people want their product. Sucks to be them!
"...to help sustain the robust expansion of the last 30 months."
AHA! Gotcha, the commie creeps.
The NYT has NEVER reported the Bush economy as a "ROBUST EXPANSION".
Pretty damed profound, I'd say.
But I don't expect them to get it or any of the great economic news like the 5% unemployment rate. I expect an article by Paul Krugman calling for the elimination of the Bush tax cuts.
The economy depends upon businesses? I always thought it was the government that brought us all this wealth.
In other news, how far the Bears go in the post season may hinge on how many playoff games they win.
Poor MSM, it has taken them all of this time to come to the correct conclusion that the U.S. economy depends on how businesses do rather than government programs.
In an Algore Paradise.
I suppose the NYTwits think growth 'hinges' on governemnt spending or electing democrats?
Nevermind. Just answered my own question.
If the NY Slimes says 2006 is going to be a bad year for the economy, then the exact opposite will happen.
Memo to all slimes employees: Starting Jan. 2, 2006 all employees will wear tweed caps and sing "Brother can you spare a dime?" while working. This will be to insure a proper and acceptable frame of mind as you churn out the daily doom and gloom.
The problem that economic naysayers have is that PRODUCTIVITY is what is driving the GDP, and the marriage of technology and the economy is just beginning.
What's sad about this is that the NYT is so brain dead they think this is philosophically deep when it's really the first hour of lecture in Economics 101.
And yet household net worth is at an all time high. $51 trillion.
"Brother can you spare a dime?">>>>>>>>
I recommend, "I'm busted", instead. Listen to the Ray Charles version and the Johnny Cash version and pick the one you like best. I go more for Ray on that one myself 8 0 )
"Then they will tell us the economy was good, but faltered under Bush's leadership even though they've never admitted it was good."
Sort of like the way the liberals refers to the wonderful solidarity, consensus, and resolve against the Soviet foe that "we" all shared during the cold war, in contrast to the divisive atmosphere created by Bush?
Not a bad analogy. I never thought of it that way. But I must say that the Dems don't ordinarily mention how much they supported the Cold War.
Forecasters are notorious for missing major turning points in the economy."
Only those employed by the NY DNC Times and other Dinosaur Media outlets
If they really want to do some brainiac economic forecasting, they should research the slide of the Old Grey Lady's stock price towards oblivion. It's like watching a train that has run off the end of a collapsed bridge.
Your fear is not misplaced...We are a nation deeply in debt; to ignore it and explain it dismissively is foolish...and dangerous...
We are also a nation with large assets. See post #25.
More tax cuts offset by spending cuts....
Earlier this month, the New York Times Co., which also publishes the Boston Globe and International Herald Tribune, said it would not issue 2006 forecasts for earnings, revenue growth, or expense growth due to a tough advertising environment.
Snort. Yup, I'd really trust their business reporting.
And make it retroactive to 2000.
"The one thing that can't be argued is that many Americans are absolutely swimming in debt. That is the only thing that scares me in today's economy."
And that so many baby boomers have less than $50,000 saved for retirement(according to some guy on Fox last night). Wonder what the break down is of dems/reps/other who are not in debt and have retirement well in hand and visa versa?
It must also be hard for them to be objective writing such a story.
Wow, you sure nailed it F.C. Happy New Year to you and yours!
as opposed to consumers, who kept the economy from imploding in 1998-2001. The current economy is the result of stromg consumer demand, while business investment has not rebounded from its amazing collapse in 2000. Now the shift will be, for a while at least, to B2B sales.
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