U.S. gross domestic product (GDP) contracted at a 6.2% annual pace in the fourth quarter of 2008, the most since 1982, the Commerce Department said Friday.The Washington Post: The prospects for an economic recovery by year's end dimmed yesterday, as government data showed that the economy contracted at the end of 2008 by the fastest pace in a quarter-century. The worse-than-expected data fueled doubts about whether the Obama administration had adequately sized up the challenges it faces in trying to pull the country out of recession.The sharp drop in the U.S. economy at the end of 2008 was much worse than previously estimated, the Commerce Department reported Friday.
The Commerce Department said the seasonally adjusted gross domestic product dropped by 6.2 percent, compared to an initial estimate of a 3.8 percent drop. That marks the worst decline since the first quarter of 1982 when the country saw a 6.4 percent drop.
Last month the Commerce Department estimated fourth-quarter GDP dropped 3.8%. Friday’s 2.4 percentage-point revision was almost five times as large as the average adjustment. “Most of the major components contributed to the much larger decrease in real GDP in the fourth quarter than in the third... The largest contributors were a downturn in exports and a much larger decrease in equipment and software,” according to the Commerce Department.
Global trade, which contributed a 0.1% gain in the advance report, actually subtracted half a percentage point from growth last quarter, indicative of the global nature of the current financial crisis.
Exports of goods and services decreased 23.6% in the fourth quarter, compared with a 3% increase in the third. Imports of goods and services decreased 16%. Spending on equipment and software dropped 29% - the most since 1958 - and business investment plunged 21%.
“We’d held out a slim ray of hope that it might surprise to the upside based on the better trade balance,” Boris Schlossberg, Director of Currency Research at GFT Forex, told Reuters. “But it’s just doom all over. There’s nothing good to take away from this report. The only thing is there’s no good news on the other side of the Atlantic, either.”
Consumer spending, which accounts for 70% of the economy, fell at a 4.3% annual pace, the steepest decline in nearly three decades.
U.S. Federal Reserve Chairman Ben S. Bernanke last week issued a dismal outlook for this year, conceding that the economy is undergoing a “severe contraction.” Still, he remained optimistic that the situation will turn around. “If actions taken by the administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability,” Bernanke said, “there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.”
With Such Dire Economic News It Is Clear That If Obama's Economic Programs Fail, America Fails!
Yet, Rush Limbaugh says he hopes President Obama fails. Rush Limbaugh was supposed to deliver a 20-minute speech to the Conservative Political Action Conference (CPAC) that was carried live, commercial-free, on CNN and Fox News. His speech ended up lasting for 1 1/2 hours, before the right-wing audience that cheered him like a hero.In his speech, Rush Limbaugh, now the titular leader of the conservative movement, defended his controversial comments that he hopes President Obama fails and said, One thing we can all do is stop assuming that the way to beat them [Democrats] is with new better policy ideas. HuffingtonPost - WATCH: Limbaugh Emphisize: Of Course I Want Obama To Fail. Republicans are wary of new ideas:
...it worries them to have [new] ideas, because ideas have edges, and they’re not totally formed, and you’ve got to prove them, and they sound strange because they’re new, and if it’s new how do you know it’s any good, because, after all, it’s new and you’ve never heard it before...Sam Stein reports on a CPAC straw poll that suggests they all want Pres. Obama to fail:
More than 1,700 people cast ballots in the 2009 CPAC poll, 57 percent of who were between the ages 18 and 25. Of the respondents, 95 percent said they disapproved of the job that President Obama was doing, only four percent approved. Meanwhile, 70 percent approved of the [party of NO] job Republicans in Congress were doing, 29 percent said they disapproved.The two Congressmen in the U.S. House of Representatives that represent Collin County residents, Sam Johnson (R) and Ralph Hall (R) and both Texas’ Senators Kay Bailey Hutchison (R) and John Cornyn (R) voted against President Obama’s economic Recovery and Reinvestment Act.
Texas Gov. Rick Perry too waged a weeks long aggressive campaign and co-wrote an op-ed piece with South Carolina Gov. Mark Sanford opposing the stimulus bill. Several days after Pres. Obama signed the Reinvestment Act into law Gov. Perry grudgingly informed the White House that he'll accept "some" of the money, leaving the door open to not taking all of the money allocated to Texas. Gov. Perry is considering rejecting part of the money because he, and presumably other Texas conservative Republicans, do not want to accept money that would fund social programs, like unemployment insurance, to which they are opposed.
