Thursday, June 26, 2014

Ron Paul Reacts to GDP Dipping Nearly 5 Percent

The final GDP numbers have just come out for the 1st quarter. It was predicted that they would be up nearly 3 percent, but guess what? They were down almost 3 percent.

At the beginning of the year it was said that the 1st quarter GDP figures would be up 2.6 percent, so they’ve only missed it by about 5 percent. But don’t worry, because those same individuals who made the predictions in January are now saying, “Well, this doesn’t mean anything. It’s all because it snowed and it was icy in certain parts of the country and that explains it. The 2nd quarter is going to be fantastic.”

And the 2nd quarter may be better. Who knows. But since they haven’t been right before, and they’ve always been wrong on recessions, I would suggest that they quite possibly will be wrong on this.

Their explanation was that consumer spending was down and there was not enough confidence to spend money. Of course, that’s the Keynesian argument: the consumers have to spend money. If they don’t they cause recession. It’s never the Fed’s fault at all.

The other thing that is totally ignored by this is the fact that half of the country is in depression already. They don’t have jobs and they are suffering the consequence. The other half is thriving and Wall Street is doing quite well. So whether or not we are going into the next recession is probably just academic.