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3.3% GDP Under Bush Was A Recession

Remember how the press reported the economy’s uptick back in the second quarter of 2008 during the Bush administration?

As we noted at the time, the reports were universal – this growth was all due to the temporary tax rebates that Mr. Bush had mailed out. And, if anything, it just showed that the recession was going to be even worse.

From a despondent Reuters:

Economy grows at soft pace

Thu Jul 31, 2008

By Glenn Somerville

WASHINGTON (Reuters) – An emergency dose of government stimulus helped the U.S. economy grow at a 1.9 percent annual rate in the second quarter, a soft pace but enough to take it off a path perilously close to recession.

Revised data from the Commerce Department released with the second-quarter figures on Thursday showed national output shrank in the final quarter of 2007 before barely edging up at the start of this year.

“With the boost from the tax rebates now fading, lower interest rates having little positive impact and signs emerging that overseas demand is weakening, we expect the economy to contract outright in the second half of this year,” said Paul Ashworth, senior U.S. economist for Capital Economics of London.

With little more than three months to go before the November 4 presidential elections, Bush administration officials insisted the economy was strong enough to keep growing…

Adding to a sense of foreboding about the economy, new claims for jobless benefits unexpectedly jumped by 44,000 last week. Though Labor Department officials said special factors were at play, the jump on claims just ahead of Friday’s unemployment report for July reinforced worry about a deeper downturn if consumers retrench on spending for fear of losing their jobs.

Economists surveyed by Reuters had expected GDP to advance by a slightly more robust 2.0 percent in the second quarter

You see, 2% growth is "perilously close to a recession" when there is a Republican in the White House. But a 3.5% increase signals a golden age when a Democrat is in the Oval Office.

As we also noted at the time, the Associated Press had a remarkably similar take on this good news:

Economic rebound not as energetic as hoped for

31 July, 2008

By JEANNINE AVERSA, AP Economics Writer

WASHINGTON – The country didn’t get the energetic rebound in economic growth hoped for from the government‘s tax rebates in the second quarter, and the economy jolted into reverse at the end of 2007, raising new recession fears.

Still, the second-quarter rebound wasn’t as robust as economists had hoped; they were forecasting growth at a 2.4 percent pace. The pickup, while welcome, isn’t likely to be seen as a signal that the fragile economy is growing healthier. There are fears that as the bracing tonic of the tax rebates fades, the economy could be in for another rough patch later this year…

With more job cuts expected for July and in coming months, there‘s growing concern that many people will pull back on their spending when the bracing effect of the tax rebates fades, dealing a blow to the shaky economy.

These worries — along with the negative GDP in the fourth quarter of last year — may rekindle recession fears

And not to be outdone, here is how the New York Times treated the news:

More Arrows Seen Pointing to a Recession

By PETER S. GOODMAN

August 1, 2008

The American economy expanded more slowly than expected from April to June, the government reported Thursday, while numbers for the last three months of 2007 were revised downward to show a contraction — the first official slide backward since the last recession in 2001.

Economists construed the tepid growth in the second quarter, combined with a surge in claims for unemployment benefits, as a clear indication that the economy remains mired in the weeds of a downturn. Many said the data increased the likelihood that a recession began late last year

“We already knew the economy was weak, and now you have both a negative growth number coupled with job losses,” said Dean Baker, a director of the liberal Center for Economic and Policy Research. “There’s a lot of real bad times to come.” …

That the economy grew at all this spring is a testament to two bright spots — increased consumer spending fueled by the tax rebates, and the continuing expansion of American exports…

Clearly the tax rebates did give some oomph to the economy,” said Robert Barbera, chief economist at the research and trading firm ITG…

The tax rebates have mostly been distributed. While the checks appear to have bolstered spending, they have failed to generate activity that is likely to carry on even after the cash has cycled through the economy, say economists.

“They slowed the downturn, but it’s clear they didn’t really provide any spark,” Mr. Baker said

As the impact of the rebate checks continues to wear off in the coming weeks, households will be left confronting the same set of troubles that have been dragging on the economy for many months: a deteriorating job market, rising prices for food and gas and plummeting housing values

“Looking forward, I don’t think there’s anything to change the lousy trend for the domestic economy,” said Joshua Shapiro, chief domestic economist at MFR, a research firm

All my cousins already know it’s a recession,” said Mr. Barbera, the ITG economist. “They have the luxury of not having Ph.D.’s…”

You see, it was the consensus.

By the way, if our media masters are convinced that the GDP only went up because of these ‘temporary’ tax rebates, why are they so convinced that permanent tax cuts are bad for the economy?

Oh, and lest we forget, a few weeks later this 1.9% increase was revised to 3.3%.

But of course that can’t compare to Mr. Obama’s 3.5% jump.

This article was posted by Steve Gilbert on Friday, October 30th, 2009. Comments are currently closed.

2 Responses to “3.3% GDP Under Bush Was A Recession”

  1. ilzito guacamolito

    ~ By the way, if our media masters are convinced that the GDP only went up because of these ‘temporary’ tax rebates, why are they so convinced that permanent tax cuts are bad for the economy? ~

    They are not convinced that tax cuts are bad for the economy. They are convinced they are bad for democrats.
    The democrats are trying to ram through all of this heavy taxation legislation now in the hopes that we will have forgotten by November 2010. Then the worst part of ObamaCare doesn’t kick in until after 2012 by when they hope you will have been sufficiently whipped into submission to vote for more hopenchange.
    Libs crave power above all and therefore have no conscience.

  2. Right of the People

    The liberal mantra: Do what I say, not what I do.


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