New York (CNNMoney) – Uncle Sam cut spending in the fourth quarter of 2012, causing the U.S. economy to contract for the first time in more than three years.
Gross domestic product, the broadest measure of the nation's economic growth, contracted at an annual rate of 0.1% from October to December, the Commerce Department said Wednesday. It was the first quarterly contraction since the second quarter of 2009, amid the Great Recession.
No mention of the fact from a news release yesterday that the citizens' confidence has also dropped. Inflation continues, but isn't mentioned because it is basically food and fuel and the government chooses not to include those The public also placed the economy, Unemployment, and the deficit as the primary sources of concern and all of those items were preferred for action by above 70% (some in the 80% range). But guns, illegals, and gay marraige is the focus of our government.
Y = C + I + G + Nx you rubes. If you want to argue neo-classical or Austrian fine, but get your basic balance of accounts right. This would be why the government tries to bolster the economy by increased spending progroms, and why exactly your silly piggy bank anecdotes do not apply to macro situations.
I can't wait to hear how House Republicans will spin this. They already have folks believing President Obama is the biggest spending president in the entire history of the U S of A – which is complete and total bunk – and they take no responsibility for their part in the great debt/deficit debacle. So, it should be quite interesting to hear their take on this.