Sharpening our wits on the grindstone of Life: What's up? Everything but the economy. .comment-link {margin-left:.6em;}

Sharpening our wits on the grindstone of Life

Saturday, July 29, 2006

What's up? Everything but the economy.

Economy dives: Inflation heats up in 2nd quarter

Can someone please explain to me how our current administration is helping our country? Not only are we currently at, or on the verge of, war with a good portion of the rest of the world, our economy is in the dumpster along with our values.

In its usual effort to win votes, the Bush administration pushes tax cuts. Everyone wants to hear that they're getting money, never mind that its a few measly bucks. Meanwhile, the lion's share of benefits go to those who are already wealthy. Reminiscent of Reagan's "trickle-down" effect, this administration's policies are supposed to help the economy grow, so that jobs can be created and everyone lives happily ever after.

So what happened? Second quarter data was released yesterday, revealing that growth is down (meaning those jobs aren't being created) and inflation is up. In effect, we've got less money coming in while having to spend more on the things we buy.
"The economy has significantly throttled back but inflation pressures are developing more fully," observed Mark Zandi, chief economist at Moody's

By "throttled back", he means that people aren't producing as many goods or buying as many houses - two factors that indicate the income levels of average Americans are stagnant.

The second-quarter's performance — which reflected the bite of high energy prices and rising interest rates on people and businesses as well as a cooling in the once red-hot housing market — was weaker than the 3 percent pace analysts were forecasting.

The 2.5 percent pace was the slowest since a 1.8 percent growth rate in final quarter of 2005, when the economy was suffering fallout from the devastating Gulf Coast hurricanes.

At the same time, the cost of goods and services are rising.
An inflation gauge closely watched by the Federal Reserve showed that core prices — excluding food and energy — jumped at a 2.9 percent annual rate in the second quarter — far outside the Fed's comfort zone. That was up from a 2.1 percent growth rate in the first quarter and marked the highest inflation reading since the third quarter of 1994, when core inflation rose at a 3.2 percent pace.

And this excludes the cost of energy. So in addition to paying more for just about everything else, we also have to pay more for gas, heating fuel, and transportation costs for the things we buy. To top it off, the inflation data used was taken before our most recent record surge in oil prices, when oil surpassed the $77 per barrel mark.

So due to the actions (and inactions) of the Bush administration, Americans have less income (relative to the economy), and are spending more for the things they need and want. At the same time, oil companies are showing recond profits. I fail to understand how this administration is helping America, unless the goal is to turn us into a corporate state.

So far, this administration has started an unnecessary war, pissed off most of our trading partners, and sent our economy into a downward spiral, while enriching their friends and largest contributors. Do all you people out there who voted for these clowns realize you made a mistake yet? If not, I hope you realize it soon, before we sink any deeper.


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