These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:
In politics, whatever the president can get voters to believe becomes the truth, but in economics the numbers establish the facts.
Unfortunately for President Barack Obama, Americans can add, and their sums are destroying fantasies the president would hoist upon a more gullible public.
Despite claims that the $787 billion stimulus package and bank bailout averted calamity, the U.S. economy is in shambles.
The Commerce Department reported gross domestic product grew 5.7% in the fourth quarter, but 60% of that was an accounting adjustment. Businesses ran down inventories at a slower pace, but in the arcane world of GDP accounting, that scores an increase in investment and growth.
Domestic consumption and real investment, which define the sustainable pace of economic expansion, contributed a paltry 1.8% to growth. That’s less than half of productivity growth, indicating more pink slips are coming.