When we tighten our belts, it means that we are trying to build up our savings. We do this by spending less. But spending drives our economy. Sales create jobs. So unless Obama has a secret plan to reverse three decades of current account deficits, the Government needs to loosen its belt when we tighten ours. If it doesn’t, then millions of us will lose our shirts.
Disturbing in the latest GDP data: commodity inflation depressing import valuation, low GDP deflator, end of inventory build and government spending cut back.
Economic releases w/e 27 August 2010 continue to paint an economy with slowing but positive growth. GDP for 2Q2010 was revised downward to 1.6% annualized.