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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: manalagi who wrote (82071)	9/5/2010 2:59:48 PM
From: ChinuSFO	Respond to of 149317

THis is one post that says Rome is not burning to the extent that the Republicans are making it out to be. Rome wes burning in 2008 and t hey are the ones who set it on fire. And you know as well as we all do, a fire that grows to such a hugh one lasting over 8 years cannot be put out in a day. If the American voters decide to send the firefighters away in Nov., then the consequences are of their making. ========================================= Munroe: Plenty of reasons for economic optimism Tapan Munroe, financial columnist Posted: 09/01/2010 03:42:51 PM PDT Updated: 09/03/2010 04:05:19 PM PDT The recent downward revision of 2010's second-quarter gross domestic production growth rate from 2.4 percent to 1.6 percent has once again heightened the buzz about a double-dip recession. I think that it is premature to talk about the reversal of the economic recovery based on data for one quarter. The Federal Reserve's official forecast of economic growth for 2010 is in the 3 percent to 3.5 percent range. The latest Economist magazine forecast for 2010 also stands at 3 percent. These by no means are stellar numbers but indicate a modest recovery from the worst recession in our lifetime. My concern is that continued cynicism and pessimism about the future of the economy may become a self-fulfilling prophecy. It is one thing to describe a situation as a glass half empty but to deny the existence of the glass is a highly risky state of mind. A recent study by the Milliken Institute of Los Angeles concludes that the American economy remains flexible and resilient and will continue to perform modestly and remain sustainable. The study forecasts real economic growth for 2010, 2011 and 2012 at 3.3 percent, 3.7 percent, and 3.8 percent respectively. To me the all important numbers are job growth as that is our fundamental personal connection to the economy. The Milliken Institute forecast on job growth for 2010, 2011, and 2012, respectively are 1.5 million, 3.1 million and 2.6 million. This is welcome news, but still does not make up for the more than 8 million jobs lost in the recession. Job growth will continue to be America's No. 1 challenge in the coming years. It is now a structural problem and not just a cyclical issue. There are several factors that provide a sound basis in general terms for the Milliken Institute forecast. These include: # Strong uptick in U.S. exports because of rapid growth in Asian economies such as China and India, which have 2010 economic growth forecasts of 9.9 percent, and 8.0 percent respectively. Other Asian economies with strong economic performance in 2010 include Indonesia (5.9 percent), Malaysia (8.8 percent), Singapore (12.3 percent), and South Korea (6.3 percent). # The European sovereign debt crisis, which several months ago triggered the initial buzz about a double-dip recession in the U.S., has abated considerably. The 16-member Euro Zone expanded at an annual rate of 3.9 percent. Germany leads the pack with an economic growth rate of 9 percent in the second quarter of 2010. Stronger economic performance will soften the adverse economic impact of austerity measures being pursued by Euro countries. # Rising U.S. business confidence is resulting in robust spending on software and equipment. # With inflation for 2010 expected to be around 1.7 percent, the Fed has been able to keep short-term interest rates (Fed funds rate) slightly above zero, which translates into a negative interest rate if we figure in inflation. This has encouraged wide borrowing. There is a good chance that the Fed funds rate will remain low well into 2011 as inflation is not likely to be a threat at least in the next 16 months. Finally, let me suggest that a double-dip recession now is unlikely. History is on our side. Robert Shiller of Yale University said in a recently in the New York Times that in the past when a recovering economy has recorded three consecutive quarters' of real GDP growth, it has never slumped back into a recession after a short interval. This has been the case since 1947 when quarterly economic data series were initiated. The good news is that so far in this recovery we have had four-consecutive quarters of real economic growth and the economy continues to grow at a modest rate. There is sound basis for Shiller's observation. Giant economies are like freight trains; they do not drop dead on their tracks. If we do have a double-dip recession, I think it will probably happen because of self-fulfilling prophecy based on fear and pessimism. insidebayarea.com