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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Think4Yourself who wrote (201276)5/8/2009 11:50:35 AM
From: Jim McMannis of 306849
 
He's creating more government programs and jobs to train people to take the more government jobs he's creating and union jobs he's protecting.

Expect slow or no economic growth going forward.

May 7, 2009

Why You Should Get Comfortable with Slower Growth
chartingtheeconomy.com

It is very likely that the U.S. will see an extended period of slower Gross Domestic Product (GDP) growth (especially when compared to the past couple decades). The growth of the U.S. economy in the past couple decades has been supercharged by consumer spending. The spending in turn was fueled by increasing consumer debt loads and declining savings rates. I argue that this trend is over, and that there is no clear successor to take over where the consumer left off. Therefore, we should get comfortable with slower growth.

The Consumer

Chart #1, below, shows the contributing components of U.S. GDP. As you can see Personal Consumption Expenditures (PCE - consumer spending) is by far the largest part of GDP. This chart clearly shows how the increase in consumer spending has been carrying the U.S. economy over the past few decades. In 1981 the consumer made up just over 60% of the economy, now it’s over 70%. That is a very significant change, and a sign of our over-consumption in the past 30 years. It is also interesting how private investment (business investment) has declined rather significantly (more about that below).
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