Friday, July 29, 2011

Data Shows Deeper Recession, Sharper Slowdown

Reuters - The "Great Recession" was even greater than previously thought, and the U.S. economy has skated uncomfortably close to a new one this year.

New data on Friday showed the 2007-2009 U.S. recession was much more severe than prior measures had found, with economic output declining a cumulative of 5.1 percent instead of 4.1 percent.

The report also showed the current slowdown began earlier and has been deeper than previously thought, with growth in the first quarter advancing at only a 0.4 percent annual pace.

Read the full story @ Reuters

In the weeks after Obama won election in 2008 Senate Minority Leader Mitch McConnell said he intended to delay Obama's proposed $1 trillion economic stimulus legislation and use his 40 Republican Senator cloture vote filibuster power to block all Democratic legislation.

Within two months of taking the oath of office, Republicans had convinced Pres. Obama to compromise and ask for half the amount of stimulus that his advisers thought necessary and substitute additional massive tax cuts for corporations and the rich in the place of infrastructure spending as part of the 2009 American Recovery and Reinvestment Act (ARRA).

Most economists now say the 2009 stimulus plan was slow to kick in, did little to promote American job growth and unnecessarily added to the deficit because the ARRA indeed provided half the amount of infrastructure stimulus spending needed and the added tax cuts did not enticed corporations to reinvest their massive profit gains in U.S. based business growth and job creation.

Republicans continue to claim only more tax cuts for billionaires and mega-corporations will fix the flagging economy. But, will yet more corporate tax cuts really promote job growth in America? As a share of GDP, the U.S. has the second lowest tax rate, behind only Iceland. This statistic flips on its head the often-repeated Republican charge that America has the second highest corporate tax rate in the world (which is only true on paper). In 2009, U.S. corporate taxes had fallen to only 1.3 percent of GDP, from 4 percent in 1965.

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