7% GROWTH: ECONOMIC TURNAROUND?

Don't bet on it. From the New York Times:

The American economy expanded during the third quarter at the fastest rate since 1984, the government reported today, offering hope that the long economic malaise has finally ended.

Consumer spending soared, foreigners bought American-made goods at a surprising clip, and companies increased their investments in equipment and technology at a pace reminiscent of the late 1990's boom.

Economists welcomed the report as a sign of strength not seen since 2000, but they cautioned that economic growth was almost certain to slow in the months ahead, as the effects of the recent tax cut and a surge in mortgage refinancing wear off. Indeed, the stock market ended trading with little change today, reflecting questions about the sustainability of this rate of growth.

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I'm reminded of the millions of Americans who continue to live beyond their means with credit cards and loans. They're able to live well for a while, years perhaps, but somehow ignore the austere economic eventuality with which they must come to terms in some indeterminate future. It is a strange irony, indeed, that such individual behavior is both a perfect metaphor for our overall economy's behavior, and is also a major contributor to that behavior. That is to say, this growth spurt is built on short term cash infusions that will not amount to long term growth--the rise in consumer spending, of course, is also fueled, no doubt, by such phantom money, and is no small part of this much ballyhooed surge in GDP. We're not out of this mess yet, and all signs point to more recession.

Check out the subheadings from this Center for American Progress article:

Many Questions Remain For Economy

*Many economic indicators are still at or below recessionary levels

*Experts agree that last quarter’s pace of growth cannot be sustained

*Income growth not taking place yet

*Massive job loss under the Bush Administration

*The most fiscally irresponsible Administration in history

*Inefficient and inequitable stimulus policy

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And just for good measure, check out this AP article via the Houston Chronicle:

Report: Number of hungry families up

About 12 million American families last year worried that they couldn't afford to buy food, and 32 percent of them actually experienced someone going hungry at one time or another, the Agriculture Department said Friday.

It was the third year in a row that the department has seen an increase in the number of households experiencing hunger and those worried about having enough money to pay for food.

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Information like this implicitly asks the question, what does "growth" mean? If you're one of the millions of Americans dealing with the "job loss" recovery, it doesn't mean much at all. Indeed, if our economy keeps shedding jobs to the wage-cheap third world as it has been doing for years now, "growth" is only of interest to the rich and those who work directly under them.

I expect the economy to get worse for most people.

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