AP Econ Writers Fret Over No 'Stimulus,' Govt. 'Cutting at All Levels'
If we're to believe Paul Wiseman and David K. Randall at the Associated Press in their Wednesday afternoon report on the economy, all of the alleged solutions which might shake the U.S. economy out of its weakness either aren't available or no one has the will to try them: stimulus, infrastructure projects, jobs programs, or another round of quantitative easing. Oh, and governments are damaging the economy by "cutting at all levels."
There's nothing, they tell us -- nothing! -- besides those supposed tried and true prescriptions which could possibly improve things. To them, everything that happened in the 1980s under Ronald Reagan must be a mirage, a fairy tale that never happened. As a result, they note, our economy is starting to resemble Japan's. The fact that Japan has been in its current malaise since the 1990s because of rampant overstimulation just doesn't compute to them.
Did it ever occur to these guys or anyone else at AP that by September 30 the federal government will have run deficits well in excess of $1 trillion for three fiscal years in a row? That multiple-year ongoing "stimulus" isn't letting up soon. You'd think they might notice it hasn't worked. Think again. Wiseman and Randall seem to believe we haven't done enough.
Here are several paragraphs from the AP pair's report, where you'll also see that Wiseman and Randall partially blame the debt-ceiling drama for the economy's current condition (bolds are mine):
Going nowhere: Economy struggles to find footing
Shoppers won't shop. Companies won't hire. The government won't spend on economic stimulus - it's cutting instead. And the Federal Reserve is reluctant to do anything more.
Without much to invigorate growth, the economy may be in danger of slipping into a stupor like the one Japan has failed to shake off for more than a decade. And Wall Street is spooked.
... Stunned by news last week that the economy barely grew in the first half of 2011, economists are lowering their forecasts for the full year and recalculating the odds that the economy will slide back into recession.
Kurt Karl, chief U.S. economist at Swiss Re, has cut his 2011 forecast for growth this year to 1.8 percent from 2.6 percent. And he has bumped up the likelihood of another recession to 20 percent from 15 percent.
... The economy started sputtering early in the year. Economists at first thought the slowdown would be temporary, the result of a short-term rise in gasoline prices and an earthquake in Japan that disrupted shipments of auto parts and electronics.
But the weakness persisted. And it worsened as a political fight over debt and deficits raised the risk that the U.S. government would not be able to pay all its bills.
... Few economists are predicting another recession, despite a series of weak economic reports. Gasoline prices have come down from their high of almost $4 a gallon in May.
... In the past, the government has helped by spending on infrastructure projects or jobs programs. This time, it's cutting at all levels. In the second quarter, government cutbacks reduced economic growth by 0.2 percentage points.
More cuts are coming. The deal to raise the debt limit calls for $917 billion in federal spending cuts. Those won't do much immediate damage to the economy because they mostly kick in after 2013, but a special congressional committee is supposed to find at least another $1.2 trillion in savings over the next decade, and no one knows where the ax will fall.
Paul and David, I can assure you of this -- Based on the track record of this president, the Senate, and the House, the prospects of real spending "cuts" are virtually zero. Oh, there may some "reductions in projected spending against the Congressional Budget Office's baseline." But baseball's Chicago Cubs (sadly, my favorite team) have a better chance of winning the National League's Central Division than the nation has of seeing real cuts coming out of Washington which would involve actually involve spending less next year on something than was spent this year -- at least until calendar 2013 (for those who don't follow baseball, the Cubs trail four other teams in their division and are 16 games out of first with 52 games remaining).
As to gas prices, as of Wednesday at 9 PM ET, average gas prices in Cincinnati were $3.66 a gallon and on the rise. If drivers are beside themselves with glee and shopping 'til they drop because prices at the pump are about 12% below their early May peak, I sure haven't seen it.
Wiseman and Randall may not be particularly astute economics reporters, but they and their AP colleagues are very good at one thing: keeping Barack Obama's name away from bad economic news. Obama's name, the office he holds, "White House," and "administration" are nowhere to be found in their 1,100-plus word piece. Why, if they included any of those words, some people might get the craaaaaaazy idea that Barack Obama, his administration, his cabinet, his czars, and his overzealous regulatory apparatchiks might actually deserve the lion's share of the blame for this mess. We can't have that.
Cross-posted at BizzyBlog.com.