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Post by AustinHoya03 on Jan 26, 2011 16:59:24 GMT -5
The options for Social Security: 1. Increase funding (which I think we're all against) 2. Cut payouts in some manner (less paid out, higher retirement age, moving from entitlement to a welfare-style program - and yes, this would include scrapping it) 3. The Soylent Green solution The President on Social Security (possibly the worst portion of last night's address): "To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. (Applause.) We must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market. (Applause.)"That sounds suspiciously like the President's solution for Social Security is to do nothing. Raise the retirement age already, and scale back benefits for all but the most vulnerable. Generations X and Y grew up with baby boomer parents that told us we'd probably never see a dime of our Social Security contributions. I think there are probably many people my age who are planning for Social Security to go *poof* long before we reach 65. While I wouldn't be happy that my forced contributions over the years would vanish, it beats the hell out of the alternative.
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TC
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Post by TC on Jan 26, 2011 17:25:59 GMT -5
That sounds suspiciously like the President's solution for Social Security is to do nothing. Raise the retirement age already, and scale back benefits for all but the most vulnerable. Parse it again : - don't go private - don't screw with current retirees or people with disabilities - don't "slash" benefits for future generations His solution sounds to me like some combination raising the age of eligibility again and possibly freezing cost of living increases. More evidence : "Social Security we could probably fix the same way Tip O'Neill and Ronald Reagan sat down together and they could figure something out. That is manageable." projects.washingtonpost.com/obama-speeches/speech/173/
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Boz
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Post by Boz on Jan 26, 2011 18:41:59 GMT -5
Yeah, I'm pretty sure it parses better the first way.
I say this since the President has never indicated in any way that he is serious about taking this on.
Not last night. Not ever.
In fairness, few Republicans are taking this on either. Ryan is the only one who is looking at it seriously. For that, he gets ravaged and demagogued by liberals and he makes Republicans look very squeamish and nervous.
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TC
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Post by TC on Jan 26, 2011 19:30:42 GMT -5
In fairness, few Republicans are taking this on either. Ryan is the only one who is looking at it seriously. Which is why you probably will not see the compromise Obama is leaving room for in his language - if your goal is to eliminate or privatize social security, bringing it into the black through lesser reforms (age of eligibilty, benefit freezes) it's strategically unwise to actually fix it.
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Post by AustinHoya03 on Jan 27, 2011 1:16:17 GMT -5
Parse it again : - don't go private - don't screw with current retirees or people with disabilities - don't "slash" benefits for future generations His solution sounds to me like some combination raising the age of eligibility again and possibly freezing cost of living increases. More evidence : "Social Security we could probably fix the same way Tip O'Neill and Ronald Reagan sat down together and they could figure something out. That is manageable." projects.washingtonpost.com/obama-speeches/speech/173/I didn't need to "parse" the text quoted above, which consists of highly vague statements designed to be politically moderate or neutral. The State of the Union Address has been a perfectly fine vehicle for proposing policies for other Presidents. By speaking passionately about reducing spending and making government more efficient while paying mere lip service to a program that is one of the nation's biggest over-expenditures, Obama doesn't look serious about reforming Social Security, regardless of whether he has "given himself room" to make specific reforms. (Would calling for raising the retirement age and freezing cost of living increases really have been that controversial? Is there anyone on the board who would oppose this?) Perhaps in being vague and not making concrete proposals, he's just deferring to the Legislature, which has a fine track record lately of confronting and solving America's most serious issues.
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SirSaxa
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Post by SirSaxa on Jan 27, 2011 8:36:53 GMT -5
Parse it again : - don't go private - don't screw with current retirees or people with disabilities - don't "slash" benefits for future generations His solution sounds to me like some combination raising the age of eligibility again and possibly freezing cost of living increases. More evidence : "Social Security we could probably fix the same way Tip O'Neill and Ronald Reagan sat down together and they could figure something out. That is manageable." projects.washingtonpost.com/obama-speeches/speech/173/I didn't need to "parse" the text quoted above, which consists of highly vague statements designed to be politically moderate or neutral. The State of the Union Address has been a perfectly fine vehicle for proposing policies for other Presidents. By speaking passionately about reducing spending and making government more efficient while paying mere lip service to a program that is one of the nation's biggest over-expenditures, Obama doesn't look serious about reforming Social Security, regardless of whether he has "given himself room" to make specific reforms. (Would calling for raising the retirement age and freezing cost of living increases really have been that controversial? Is there anyone on the board who would oppose this?) Perhaps in being vague and not making concrete proposals, he's just deferring to the Legislature, which has a fine track record lately of confronting and solving America's most serious issues. Except that SS is NOT one of the nation's biggest overexpenditures. The latest Social Security trustees report stated that the program has a $2.6 trillion surplus and will remain fully solvent until at least 2037. Moreover, the fund requires only a slight increase in revenue to ensure long-term viability.
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EasyEd
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Post by EasyEd on Jan 27, 2011 10:18:39 GMT -5
Please tell me where that $2.6 Trillion is stashed away. It's been spent.
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TBird41
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Post by TBird41 on Jan 27, 2011 10:30:56 GMT -5
Please tell me where that $2.6 Trillion is stashed away. It's been spent. EasyEd's right. That money has already been spent by the rest of the gov't. The $2.6 Trillion surplus isn't in cash, it's in Treasury bonds. "Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration. The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest." www.google.com/hostednews/ap/article/ALeqM5gAU2-jtPEDCH3pZrhjdQPpJUg1ww?docId=a9fb321a8efc41699a672b960d4096b4
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TC
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Post by TC on Jan 27, 2011 12:35:03 GMT -5
The State of the Union Address has been a perfectly fine vehicle for proposing policies for other Presidents. Great, when has a President proposed large scale changes to Social Security in a SOTU and then gotten them passed? Just for fun, here's Reagan's 1982 SoTU - the bipartisan agreement on Social Security was reached in 1983, 10 days before his 1983 SOTU. Let me know if you can show me where he proposed changes to Social Security in it : www.nationalcenter.org/ReaganStateofUnion82.html
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SirSaxa
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Post by SirSaxa on Jan 27, 2011 16:51:09 GMT -5
Let's take a moment and look at the series of claims and counterclaims that just occurred. 1. Austin Hoya claimed that Social Security is: a program that is one of the nation's biggest over-expenditures 2. I post the following clarification: Except that SS is NOT one of the nation's biggest overexpenditures. 3. Then Ed makes another point entirely, having nothing to do with whether or not SS is "one of the nation's biggest over-expenditures" Please tell me where that $2.6 Trillion is stashed away. It's been spent. 4. At which point T-Bird chimes in to confirm Ed's mistaken implication: EasyEd's right. That money has already been spent by the rest of the gov't. The $2.6 Trillion surplus isn't in cash, it's in Treasury bonds. So here's what happened.. it is typical of the kinds of "Logic" and "analysis" that is common in Washington.. and yes, especially on the Right these days. Social Security is not in any danger whatsoever in the near term and doesn't require much tweaking to be completely solvent in the long term. But that doesn't stop Austin from attacking it as though it were a primary cause of the current budgetary deficits. Once that point was clarified and we realize SS is actually in a HUGE surplus, Ed chimes in with "where's the money"? And T-bird adds, "The government spent it and issued T-Bills instead". OK, that is true. But 1. SS isn't the problem - it continues to run a surplus. 2. T-bill are not the problem either. The "T-Bills" issued to the SS Trust are just as solvent and more-or-less identical to those we've been selling to the Chinese, Japanese, Saudis and others... to finance what? The problem is the money has been used to finance two wars and three rounds of reckless tax cuts for the wealthiest Americans, as well as the rapid growth in discretionary spending -- all by the Bush admin. We have cut taxes so much over the last 10 years that tax revenues are now at the lowest % of GDP since the '50s. And we wonder why we are running deficits? The second problem is the global economic catastrophe that occurred at the close of 8 years of the Bush administration. Has the deficit grown during the Obama Admin? Yes. Why? 1. The economic catastrophe led to enormous loss of jobs -- 8 million fewer jobs, fewer hours worked for those who kept their jobs, and much lower revenues for business. Naturally, all those factors result in lower incomes, therefore lower tax revenues (ergo, bigger deficits) 2. In order to prop up the economy and counter the rapidly reduced spending on the part of consumers and business, the government stepped in to help stimulate the economy and restore growth and jobs. And they have been successful with that. After losing 8 miilion jobs, last year we started to gain jobs again, netting 1 million. And the US economy is growing again. Still needs to grow faster. Of course, we do need to address our budget deficit for our long term prosperity. That plan needs to be developed now, but implemented in a year or two when the economy will be strong enough to withstand the changes. The solutions need to include cost cuts -- which really means to our biggest programs -- Defense and entitlements, and it will also require tax increases.... there is no way to cut expenditures enough to compensate for the enormous and irresponsible tax cuts enacted over the last 10 years. So why should the President lead off the very tough negotiations to solve all these problems by focusing on cuts in SS? -- a program that isn't the problem -- and with cuts that will hurt lower income Americans the most? And why does the right insist on knowingly mischaracterizing the problem (e.g. "Safety nets and hammocks") and how we got into this mess in the first place? If we don't accurately identify the problems (and SS is clearly not the problem) how will we ever solve them?
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Post by hoyawatcher on Jan 27, 2011 23:02:36 GMT -5
SS continues to run a surplus ? Interesting perspective that doesn't seem to be shared by the "experts". It ran a deficit last year and will continue to do so. You can however take comfort that at the current projections it won't run out of money until 2037. I wouldn't do anything either apnews.myway.com/article/20110127/D9L0BDUG0.htmlFWIW while Obama has said he doesn't want SS exposed to the "whims" of the stock market any trustee of a private defined benefit plan that invested solely in treasury bonds would be fired. You have to have some exposure to equities in a legit defined benefit plan.
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EasyEd
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Post by EasyEd on Jan 28, 2011 10:02:13 GMT -5
The Social Security trust fund is in the form of borrowing from the government, i.e. from the American people. The money has been spent on other programs, such as defense, farm subsidies, the arts, welfare, etc. and replaced by IOU's, that is, T-Bills. With no plan from either the administration, the Congress, Republicans or Democrats to bring the debt of this country under any sort of control, the Social Security T-Bills are in the same danger as homeowners' borrowing to finance mortgages. We are heading for a financial collapse in this country with the danger the Social Security trust fund will be worthless. The claim that Social Security T-Bills are just as secure as any other T-Bills is true. It's just that none may be worth very much unless we apply the axe to all spending, including defense, entitlements, and discretionary spending; and, accompany that with some tax increases. However, to pretend that only the top 2% will be able to carry the burden of tax increases is wishful thinking. Just look at the extension of the Bush tax rates just passed. The so-called cost of that extension involved middle class benefits amounting to more than three time that of the top 2%. It's also getting old to hear the current debt crisis blamed on Bush. Blame Bush for his part but start to own up to the part Obama/Pelosi/Reid had in the crisis; and, that part is very significant.
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TC
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Post by TC on Jan 28, 2011 10:47:32 GMT -5
It's also getting old to hear the current debt crisis blamed on Bush. Blame Bush for his part but start to own up to the part Obama/Pelosi/Reid had in the crisis; and, that part is very significant. One of the things that annoy me most about fiscal arguments is how people conflate "the debt" and "the deficit". They aren't the same things, and in this case mixing them up provides strawmen to beat up on. Also insane to complain about the extension of Bush tax rates in one sentence and in the next try to absolve him for their budgetary effects.
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SirSaxa
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Post by SirSaxa on Jan 28, 2011 12:07:22 GMT -5
The Social Security trust fund is in the form of borrowing from the government, i.e. from the American people. The money has been spent on other programs, such as defense, farm subsidies, the arts, welfare, etc. and replaced by IOU's, that is, T-Bills. With no plan from either the administration, the Congress, Republicans or Democrats to bring the debt of this country under any sort of control, the Social Security T-Bills are in the same danger as homeowners' borrowing to finance mortgages. We are heading for a financial collapse in this country with the danger the Social Security trust fund will be worthless. The claim that Social Security T-Bills are just as secure as any other T-Bills is true. It's just that none may be worth very much unless we apply the axe to all spending, including defense, entitlements, and discretionary spending; and, accompany that with some tax increases. However, to pretend that only the top 2% will be able to carry the burden of tax increases is wishful thinking. Just look at the extension of the Bush tax rates just passed. The so-called cost of that extension involved middle class benefits amounting to more than three time that of the top 2%. It's also getting old to hear the current debt crisis blamed on Bush. Blame Bush for his part but start to own up to the part Obama/Pelosi/Reid had in the crisis; and, that part is very significant. Thank you for your reasonable post. I agree with your point about the 2% not being enough. On the other hand, temporarily continuing the tax breaks for the 2% contributes very little additional stimulus benefit, but does add significantly to the deficit. Given that, and the fact that the 2% already got far and away the bulk of the 3 Bush tax breaks, continuing them at this time of crisis is, IMHO, unjustified -- economically AND philosophically. But political reality trumped all and they were extended. Does the Obama/Pelosi/Reid team share responsibilty for the current deficit? Yes, but IMHO, more by what they haven't done than by what they have. That is, the economy cratered at the end of Bush's term. At that point, it became CRUCIAL for the Fed Govt to overspend to stimulate the economy. That stimulus was very effective, though not large enough nor effective enough. TARP too was extremely effective. As a result of these things the economy's free fall was stopped, and modest growth has been restored. Of course, we will run a bigger deficit this year because of the Bi-Partisan extension of the Bush Tax cuts. To me, the "failures" of Obama/Reid/Pelosi were not taking steps to plan for future cuts to programs and future tax increases. But realistically, could they have done so in today's hyper-partisan world? And could they have done so given all of the other crucial things they did accomplish? I don't think so. So what do we do now? Using SS as an example, why start by proposing changes in age requirements and benefits? Why not look at MEANS testing first? Do wealthy older people really need to collect SS checks too? How many here would agree with that? IMHO, the easiest, least painful way to START to tweak SS is means testing. let's see how far we get with that before asking hardworking men and women of limited means ... especially those in jobs requiring physical labor... to postpone their retirements, and to settle for lower, much needed monthly payments. Another point, looking at the current state of the budget and deficit -- in the midst of economic crisis -- artificially exaggerates the problem. When the economy returns to normal growth patterns, tax revenues will increase and Govt. expenditures will go down (some absolutely, others as a % of GDP) ...thus the deficit will shrink naturally. No, not enough. I am not suggesting that. We do need to work on it. But the key for me is to be honest about what the problems are. Where the differences are. We will need spending cuts and tax increases... and not just for the top 2%. You and I would undoubtedly disagree on which costs to cut and by how much, and which taxes to raise.... but that is normal give and take in a democracy. At least we would be talking about what the real problems are. And THAT is what I don't like about this SS discussion and where I find huge disagreements with, for example, Paul Ryan - because he mis-characterizes the problems, the degree of the problems, and the causes of the problems.
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SirSaxa
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Post by SirSaxa on Jan 28, 2011 12:20:25 GMT -5
SS continues to run a surplus ? Interesting perspective that doesn't seem to be shared by the "experts". It ran a deficit last year and will continue to do so. You can however take comfort that at the current projections it won't run out of money until 2037. I wouldn't do anything either apnews.myway.com/article/20110127/D9L0BDUG0.htmlFWIW while Obama has said he doesn't want SS exposed to the "whims" of the stock market any trustee of a private defined benefit plan that invested solely in treasury bonds would be fired. You have to have some exposure to equities in a legit defined benefit plan. Hoyawatcher. You are correct that the current economic crisis did cause SS to experience a temporary current account deficit in 2010 -- because 8 million jobs were lost -- along with the SS payments those jobs would generate, and because more people took early retirement and/or opted for earlier/younger participation in SS benefits. Of course, that also lowers their monthly payments for life -- thus impacting longer term SS expenditures. Is comparing SS to a private, defined benefit plan really useful? What defined benefit plan comes anywhere near the size of SS? What would investing SS revenues in the stock market do to prices? Asset bubble? It would certainly make wealthy people (who own the vast majority of stocks) a lot wealthier as prices would be driven up. And what would happen if we incur another economic crisis as we did two years ago when the stock market dropped by more than 50%? And who suggested "not doing anything" about modifying SS to further ensure its long term solvency?
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Post by jerseyhoya34 on Jan 28, 2011 12:28:47 GMT -5
Another point on the economy - we had GDP growth north of 3% in the last quarter. While that is not exactly a boom, it is far from the economic armageddon that some strangely predict. Before dramatic measures are taken, particularly with respect to the deficit, it might be wise to see how this recovery settles out.
As Saxa mentions, this growth will help the deficit problems and will lessen the supposed need to cut programs (and, in many cases by extension, jobs). This may be why we have not seen a jobs plan from the House leadership (or really any movement on the deficit as yet).
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TBird41
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Post by TBird41 on Jan 28, 2011 13:19:06 GMT -5
That is, the economy cratered at the end of Bush's term. At that point, it became CRUCIAL for the Fed Govt to overspend to stimulate the economy. That stimulus was very effective, though not large enough nor effective enough. TARP too was extremely effective. As a result of these things the economy's free fall was stopped, and modest growth has been restored. Of course, we will run a bigger deficit this year because of the Bi-Partisan extension of the Bush Tax cuts. To me, the "failures" of Obama/Reid/Pelosi were not taking steps to plan for future cuts to programs and future tax increases. But realistically, could they have done so in today's hyper-partisan world? And could they have done so given all of the other crucial things they did accomplish? I don't think so. So what do we do now? Using SS as an example, why start by proposing changes in age requirements and benefits? Why not look at MEANS testing first? Do wealthy older people really need to collect SS checks too? How many here would agree with that? IMHO, the easiest, least painful way to START to tweak SS is means testing. let's see how far we get with that before asking hardworking men and women of limited means ... especially those in jobs requiring physical labor... to postpone their retirements, and to settle for lower, much needed monthly payments. Another point, looking at the current state of the budget and deficit -- in the midst of economic crisis -- artificially exaggerates the problem. When the economy returns to normal growth patterns, tax revenues will increase and Govt. expenditures will go down (some absolutely, others as a % of GDP) ...thus the deficit will shrink naturally. No, not enough. I am not suggesting that. We do need to work on it. But the key for me is to be honest about what the problems are. Where the differences are. We will need spending cuts and tax increases... and not just for the top 2%. I don't think the stimulus was necessary, or effective. I also think it was poorly written for what it wanted to accomplish. www.becker-posner-blog.com/2009/01/infrastructure-in-a-stimulus-package-becker-1.htmlYes, GDP is growing. Is that b/c of the bailouts, quantitative easing, other Fed activities, the extension of the tax cuts, the stimulus or some other cause? The lack of an impact of the stimulus and its "investments" on unemployment would seem to show that it isn't the reason for the GDP growth and that it was poorly designed. Also, regarding the debt--are people paying attention to what is happening in Europe? I'm not talking about the U.S. becoming Greece, but what happens to our ability to finance our economy if Portugal & Spain need bailouts? What if the Eurozone breaks apart? There are a lot of things that could very easily happen that would send the global economy back into recession and freeze up the debt markets. What happens to our economy and deficits then? And I think that Social Security needs reform. I don't know if it needs drastic measures or not. I know that Medicare needs reform. I think that probably needs the most drastic measures of the various entitlements (excluding Obamacare, but we'll leave that one out). I do know that Paul Ryan is right that we are in a window where we can get our act together without needing drastic austerity measures and that he's also right in that the window isn't going to stay open for very long.
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Post by Coast2CoastHoya on Jan 28, 2011 14:41:29 GMT -5
So a friend of mine shared her SOTU drinking game words with me. Must've been a doozy:
Jobs Economy Our kids (or our children) Democrats Republicans Future Education
I enjoyed the speech, for what it was. Not the best one ever, not the worst one ever. I didn't bother watching the rebuttals yet (which I agree are kinda stupid . . . when was the last time Repubs or Dems said anything especially noteworthy in one?).
SOTU is a time for big, lofty goals to be stated and the details worked out later. I have no problem with that.
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SirSaxa
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Post by SirSaxa on Jan 28, 2011 16:02:35 GMT -5
Wow. OK T-bird. I didn't realize we were THAT far apart. It sounds like you'd like to re-use the Herbert Hoover playbook -- no stimulus, balance the budget, and create the Great Depression. Most economists believe that kind of thinking was proven to be a disastrous failure 80 years ago. The link you provided goes to an opinion piece from Jan. '09. It blasts the stimulus before it was even written.... let alone enacted. Not sure how that contributes to the conversation. But I am reminded of a quote from Mark Twain: Never argue with a man whose job depends on not being convinced.
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SirSaxa
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Post by SirSaxa on Jan 28, 2011 16:16:52 GMT -5
Another point on the economy - we had GDP growth north of 3% in the last quarter. While that is not exactly a boom, it is far from the economic armageddon that some strangely predict. Before dramatic measures are taken, particularly with respect to the deficit, it might be wise to see how this recovery settles out. As Saxa mentions, this growth will help the deficit problems and will lessen the supposed need to cut programs (and, in many cases by extension, jobs). This may be why we have not seen a jobs plan from the House leadership (or really any movement on the deficit as yet). For those who don't have time to follow business and economic news... not the most entertaining subject afterall... A few simple facts: 2009 US GDP -- DOWN 2.6% 2010 3rd Qtr GDP -- UP 2.6% 2010 4th Qtr GDP -- UP 3.2% 2010 FULL YEAR GDP - Up 2.9% [url=http://www.cnbc.com/id/41309932 ]CBNC - Economy Grows at 3.2% Pace, Pushed Up by Sales Spike [/url][/b][/size] ExcerptsThe U.S. economy gathered speed in the fourth quarter with a big gain in consumer spending and strong exports pushing demand ahead at the fastest clip in more than 26 years.
The economy grew at a solid 3.2 percent annual rate in the final three months of 2010, but it would have risen at a 7.1 percent rate if businesses had not put the brakes on rising inventories, the Commerce Department said Friday.
It was the largest rise in final demand since the second quarter of 1984.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 4.4 percent rate in the final three months of last year—the fastest pace since the first quarter of 2006. It added 3.04 percentage points to GDP growth, its largest contribution in more than four years.
Support to growth during the fourth quarter also came from a pick-up in exports, which resulted in a narrower trade deficit. Trade added 3.44 percentage points to GDP growth, the first contribution in a year, and the biggest since 1980.[/blockquote]
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