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I can feel the economy slowing
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by YankeeJim | January 24, 2012 at 07:36 am
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I didn’t go Christmas shopping and no one gave gifts this year. When I go to the store or mall, there are plenty of parking spaces. People are hunkered down.
In Washington DC metro, there are plenty of folks still dining at bars and restaurants because they are government workers and they are still working. Travel to “real” America and things are much different. It is slow out there.
“IMF report: Global economy to slow sharply
By Howard Schneider, Tuesday, January 24, 10:01 AM
The world economy is slowing sharply, and the euro region headed for recession this year, the International Monetary Fund predicted Tuesday in a bleak update of global conditions.
Overall, the world economy is expected to expand 3.25 percent in 2012 -- down from the 4 percent projected by the IMF in the fall.
That figure includes 8.2 percent growth in China, still the world’s most quickly expanding economy, and 7 percent in India. U.S. Growth is forecast at 1.8 percent, the same as the fund projected in the fall.
In those cases and for the rest of the world, the IMF said growth was being crimped by what remains the world’s major economic risk -- the ongoing financial crisis in the euro zone.
In a trio of reports released Tuesday morning, the IMF forecasts a “mild recession” for the 17 nation euro zone this year, and warns that matters could easily worsen.
In its “downside scenario,” the fund said that a continued rise in European government borrowing rates and a worsening of problems with the region’s banks would push the world into recession.
“The current environment...provides fertile ground for self-perpetuating pessimism,” the fund wrote.
The agency is pressing Europe to do more to resolve its problems, and today’s projections bolster the case.
The forecast envisions sharp contractions in Italy and Spain, the two countries that are the main focus of efforts to stop the spread of a crisis that has already required international bailouts of three smaller nations.”
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YankeeJim
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at 12:26 on January 24th, 2012
In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided. It is no surprise that countries that have historically performed poorly and had unsustainable social agendas would be failing in this global economic crisis. Every where in the once industrialized countries measures are being taken to claw back or reform the social agendas to ease the burden on the dwindling tax base. People who fight such austerity measures or refuse to accept the reality and necessity of downsizing government are a detriment to their own future. Success will go to those countries who can manage with less while ensuring the conditions necessary for private sector growth. It is incumbent on governments everywhere to reduce their size and scope relieving the pressures of their demands on the tax payer. People are going to have to unlearn their sense of entitlement.
at 18:13 on January 26th, 2012
Austerity measures don't work and in fact have wrought disaster in Europe (consider Ireland, where the VAT has risen to 23% and thousands are striking or protesting in the streets). Severe budget cuts only dampen growth and prolong the slog back to some semblance of substantive economic recovery. What's needed is a deeper integration among the member nations of the Eurozone; the original divergence occurred when the less competitive countries, like Greece and Portugal, incurred more development-related debt than they could handle -- nothing to do with social programs, by the way, where expenditures have remained relatively stable per capita since 1999. It's going to take a fundamental political shift among European political leaders -- including, potentially, a referendum on Great Britain's entry into the EU -- to get anything done. Whether or not they have the capability, or even the will, to do so is another story.