Right Opposition

The 5.7% jump in the 4th quarter 2009 has excited many who claim that this is evidence that government intervention in the markets has worked. Some think we are saved because of the government’s intervention via the stimulus prorgrams of the past year. But let’s look at three important points.

GDP Is Still Low

The actual GDP in the 4th quarter stood at 14,463.4 billion dollars. The high was in the 3rd quarter of 2008 and we aren’t back there yet. The number may be an improvement but we are still below where we were. This is not surprising because we know unemployment is still high.

GDP Report is Incomplete

The 5.7% report is “incomplete” according to the Bureau of Economic Analysis. Most economist expect that the number will drop when all factors are finally factored in. Don’t count your chickens just yet.

GDP is Built on Government Deficit Spending

The present economy is growing, in part, because of deficit government spending. Every penny of the stimulus comes from taxpayers. But much is deficit. That means we have a massive federal debt hanging over our heads which must be repaid.

The number is good and is a slow improvement but keep it in perspective.

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