tbar220
Posts: 6706
Joined: Wed Feb 02, 2000 12:08 pm

Economic Growth At 0.2%.

Thu Aug 30, 2001 11:05 am

Dear All,

Tell me what you think on this.

The GDP growth level for the past quarter was 0.2%, the lowest since 1993.

In an online article that I read online, the following was said...

"Private economists and the Bush administration are counting on nearly $40 billion in tax rebate checks and the aggressive credit easing by the Federal Reserve (news - web sites) to lift the economy to higher growth rates in the second half of this year."

Now I'm not looking at this as a Democrat or a Republican. But I took economics last year, and I don't see how the tax cut can affect the economy that quickly. Perhaps I'm wrong, but I think these "private economists" are being a little too optimistic here.

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Confuscius
Posts: 3568
Joined: Wed Aug 29, 2001 12:29 am

RE: Economic Growth At 0.2%.

Thu Aug 30, 2001 11:09 am

Worst yet, the national debt will be one trillion dollars more than current CBO projection. Although, it'll still be a reduction.
Ain't I a stinker?
 
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RE: Economic Growth At 0.2%.

Thu Aug 30, 2001 12:03 pm

Tzvika,

Generally speaking, a lot of economist's will suggest taxation cuts to get people out there spending more money to boost GDP. Sometimes it works, sometimes it doesn't.

mb
 
Carioca Canuck
Posts: 632
Joined: Sun Apr 23, 2000 4:03 pm

RE: Economic Growth At 0.2%.

Thu Aug 30, 2001 12:11 pm

It's better than being down 20 %.
 
Transactoid
Posts: 785
Joined: Sun Mar 18, 2001 2:03 pm

RE: Economic Growth At 0.2%.

Thu Aug 30, 2001 12:32 pm

Bah. I wish everyone would just turn off the financial news report.

The economy is a perfect example of a self-fullfilling prophecy.....
 
tbar220
Posts: 6706
Joined: Wed Feb 02, 2000 12:08 pm

RE: Economic Growth At 0.2%.

Thu Aug 30, 2001 1:48 pm

True Mx5, theoretically speaking, a tax cut will boost the economy. In a perfect world, that will always work. A tax cut increases investment and consumption, thus driving up GDP.

Yet in todays world there are many other factors, many, many factors that we cannot begin to contemplate. And from history, I think it takes longer for a tax cut to actually affect the economy than a single economic quarter. And if the economy is worse than predicted, a tax cut may not do any good if it is not enough (that is a whole 'nother argument, some thing the tax cut is too much, some think its not enough, lets not get into that).


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