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The economy is rapidly cooling. I was hopeful that I might have been wrong and that conservative policies might work this time, despite mountains of evidence that says it never works. Consumer Spending Growth is at 1.5% - the lowest rate in over 5 years. Growth of $1 menu items at fast-food outlets is at a 3 year high. Record openings of new stores like Dollar General, TJ Max, Five-Below. Meanwhile record closing of stores like JC Pennies, Sears and Best Buy. Interest rates are on the rise. A record number of people being incarcerated for inability to pay meager traffic fines. All these things signal that we have turned the corner and are entering a Bear market. Sorry folks, but all the signs continue to show that cutting taxes on the rich never helps the middle class and always leads to recession. How many times do you need to be slapped in the face with it?

Image for post The economy is rapidly cooling.  I was hopeful that I might have been wrong and that conservative policies might work this time, despite mountains of evidence that says it never works.  Consumer Spending Growth is at 1.5% - the lowest rate in over 5 years.  Growth of $1 menu items at fast-food outlets is at a 3 year high.  Record //openings// of new stores like Dollar General, TJ Max, Five-Below.  Meanwhile record //closing// of stores like JC Pennies, Sears and Best Buy.  Interest rates are on the rise.  A record number of people being incarcerated for inability to pay meager traffic fines.  All these things signal that we have turned the corner and are entering a Bear market.  Sorry folks, but all the signs continue to show that cutting taxes on the rich **never** helps the middle class and always leads to recession.  How many times do you need to be slapped in the face with it?
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VicZincs avatar Money & Economics
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I don't agree or disagree, but I know you like to count the votes. I believe making judgements on the economy 3 months after a major change in tax law is unwise. I think next year this time we will have a better indication of whether things are working better or worse. I know I am getting more money in my paycheck than I was before. Whether I spend it or save it is my business and my responsibility, not some talking head on a financial news program. JMHO.

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@2753496

That's interesting. I also see the prices for steel and aluminum are going up fast. Supply and demand.

@2753496

That's great news for those in Japan, Belgium, Brazil, India and China where the caterpillar equipment is made. Woo-hoo.

Maybe if they can open a factory in the USA we would benefit?

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@2753962

The progressive policies in CA went exactly according to plan: creation of a filthy-rich, liberal governing elite presiding over an impoverished underclass (CA poverty rate is highest in the nation, when local cost of living is factored in), which provides the elite with a permanent political majority, exactly what American progressives are striving for nationally.
http://www.politifact.com/calif...overty-rate-w/

@VicZinc Thanks for sharing that. What you got to explain the next 5 states on the list?

Supplemental poverty rate rankings:
1. CA, 23.8% (already explained)
2. D.C., 22.7% (crackhead mayor?)
3. NV, 19.8% (Harry Reid?)
4. FL, 19.5% (the influx of retired New Yorkers?)
5. AZ, 18.8% (too many illegals?)
6. NY, 18.1% (see CA, although not quite as nutso)
7. HI, 17.3% (not as bad as CA, because illegals can't get in as easily)
https://en.wikipedia.org/wiki/L...y_poverty_rate
So of the top 7, Vic, 4 are HEAVILY blue, one is light blue, one is purple, and one is light red. Do you see a pattern, mayhap? biggrin smilie

@Thinkerbell Supplemental poverty rate rankings: 1. CA, 23.8% (already explained) 2. D.C., 22.7% (crackhead mayor?) 3. NV, 19.8%...

Arkansas
Kentucky
Alabama
Lousianna
New Mexico
Mississippi

So what you are saying is the Republican approach is keep everyone poor so the 'cost of living' will stay just above the poverty level. Smart.

@VicZinc Arkansas Kentucky Alabama Lousianna New Mexico Mississippi So what you are saying is the Republican approach...

Whatever the Republicans are doing, it beats what the Democrats are doing, when it comes to affording where you happen to be living.

@VicZinc To each his (her) own.

Indeed, Vic. Imported votes are your preference. biggrin smilie
Image in content

@Thinkerbell Indeed, Vic. Imported votes are your preference.

My grandparents were "imported". I suspect yours too?

@VicZinc My grandparents were "imported". I suspect yours too?

Yes, but legally, and they voted for Stevenson, but by the time McGovern rolled around, they discovered that the Democrats no longer represented their interests.

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@2753494

True that.

The conservatives never learn. Trump still patting himself on the back for a growing economy, which he inherited from President Obama. wonder who he will blame when it goes bust again.

@Will_Janitor Saying things like, "conservatives never learn", is quite a generalization.

Yes it is. I just came off a post where all I saw was people saying how stupid and ignorant liberals are. That's all I ever hear from some people on this site.

I have to admit, in the short run, Trump's economic plan was working, but I'm not sure it will last. The rich get richer, the poor get poorer, it's always been that way, and probably won't change anytime soon.

The U.S. economy is on the comeback trail, and that momentum could lift GDP growth to at least 5% this year, thanks in large part to forward-looking capital expenditure plans, spurred by the 2017 Tax Act.

“We could create 5% nominal GDP this year,” said Rick Rieder, global chief investment officer of fixed income at BlackRock, during an interview on FOX Business’ Maria Bartiromo’s Wall Street. “That’s a pretty impressive number.”

The Obama administration’s economic policies failed to meet even their supporters’ predictions. In 2010, the Obama White House confidently forecast that GDP growth would “accelerate in 2011 to 3.8%” and “exceed 4% per year in 2012-2014.” It never happened.

Obama never had even a single calendar year of 3 percent GDP growth. His actual post-recession average was an anemic 2.1 percent and his final year in office was a dismal 1.5 percent.

This was largely thanks to the Obama administration’s disastrous progressive policies. Between the failed Keynesian “stimulus” experiment, the crushing blows Dodd-Frank dealt community banks, the ObamaCare nightmare, and a deluge of anti-business regulation, the last administration did its best to put our economic future squarely in the government’s hands.

As a result, the economy failed to produce enough good paying jobs, people dropped out of the labor force, wages stagnated, paths to the middle class closed and income inequality increased. Predictably, progressive economic policies produced the very problems against which progressives rail.

Despite the failure of their policies, the Obama administration’s “brain trust” rejected the notion that Trump’s free market policies could turn the economic tide.

Budwicks avatar Budwick Disagree 0Reply
@Budwick The U.S. economy is on the comeback trail, and that momentum could lift GDP growth to at least 5% this year, thanks...

Time will tell, again. Same tired arguments from the right.

Fact is the growth was slow and steady, not this rocky fits-and-starts we are now experiencing.

Again, I do hope you (and the conservatives) are right, however history tells me not to get to hopeful, we have been down this road many times before.

There are valid arguments that in an economy the size of the current US a 5% growth rate is unattainable. I hope I am proven wrong.

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@2754004

Excellent point. Homelessness increased 14% since the election. I agree. Time has told!

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@2754078

The article you posted says '2 years' not 30.

None so blind as they who will not see.

@VicZinc Time will tell, again. Same tired arguments from the right. Fact is the growth was slow and steady, not this...

Time has already told Vic.
Progressive leadership and economic policies suck.

5% is crazy high - agreed.
Obama said his measly 1-2% was the new normal - get used to it.

Budwicks avatar Budwick Disagree 0Reply
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@Budwick

Better get that zipper fixed. Every time you hear a Hillary joke you bust through your fly.

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@2756251

Tough question.

The Fed influences interest rates by setting the Federal Funds Rate, the inter-bank loan rate. Most banks gauge their product (consumer loans) interest rates on this rate.

Keeping the rate low stimulates borrowing and, in theory, growth. If the growth is too slow the Fed often cuts rates. That what it did, many times, under Obama in an attempt to stimulate production and spending.

On the other hand if inflation is too high (that is the economy is too "hot") the Fed often will raises rates to force the economy to contract, driving down demand, and therefore stimulating price cuts to spur consumer consumption.

What I am see is prices going down, not up - or at least it seems that lower cost items are being offered to consumers ($1 menus and $1 stores) in a effort to spur consumption which to me indicates a recession (shrinking growth). I see signs that people don't have much 'extra' cash with which to buy things, or pay their speeding ticket, for example.

My supposition is that if the Tax Cut had worked as was claimed it would, we would see more consumer spending, not less. People would be seeking out higher cost items, not lower cost ones. And people would have more pocket money, not less.

The fact that interest rates are being pushed up now, by the Fed, scares me. Historically, raising rates would stimulate contractions and have previously been used only to curb inflation. Raising rates would cool the economy not heat it up.

I personally do not think inflation or consumer spending is at a level yet were the Fed needs to raise rates. And I think the current Fed is reacting to the Reaganomic idea that the tax cuts will stimulate consumer spending and inflation. I don't see that happening right now. Maybe it will - they have a lot more information than I do.

Another possible (conspiracy) theory that that they are doing it on purpose so that the billionaires can load up on bonds, when the rates are high enough the stock market will crash and the bond market will sky rocket. Then they can take their profits and dump them into now deflated market, cut the rates again and start over.
The old pump-and-dump. It works every time. Nothing would surprise me at this point.

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@2756281

Yep. I have been wrong before, often. Just calling out the signposts along the road.

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