GDP Up But Economic Future Still Uncertain

By Kyle LaFleur

The Gross Domestic Product rose slightly to two percent according to new third quarter numbers out Friday.  With November’s midterm election less than four days away and the economy being a hot button issue, the increase sent mixed feelings.

“Clearly these numbers are consistent with the story that it would be suicidal to let the Bush tax cuts expire or it would be very painful for the economy if the unemployment benefits aren’t extended during the lame duck session,” said American Enterprise Institute for Public Policy Research (AEI) scholar John Makin.

GDP reports come out midquarter which prompted Makin to warn the public about taking the number as set in stone.

“This report will probably be revised downward.  There is a tendency, there’s been a consistent tendency for the GDP initial prints to be higher then the final print.  Last quarter ended up at a 1.7 percent rate, started out at rate well over two percent,” said Makin.

Makin went on to predict that the fourth quarter GDP number would end up around one percent.

New GDP Numbers Show Slowed Rate Of Growth

According to statistics released Friday by the U.S. Department of Commerce, the nation’s Gross Domestic Product (GDP) grew at a rate of 3.2% during the first quarter of this year. Yet while some are celebrating the news, the figure represents a drop-off since the last quarter of 2009, when real GDP increased 5.6%. Still, President Barack Obama struck an upbeat tone when he addressed reporters in the White House Rose Garden this morning.

“What this number means is that our economy, as a whole, is in a much better place than it was one year ago...We’re heading in the right direction, we’re moving forward. Our economy is stronger, that economic heartbeat is stronger,” he said, flanked by a pair of CEO’s of clean energy companies who have been able to increase domestic payroll thanks to Recovery Act awards.

In reality, however, the statistics show the country’s economy remains in less-than great shape. During the early months of 2010 businesses built up inventories at a slower rate than the previous quarter, national exports decelerated and housing sales remained sluggish. In addition, prices of goods increased slightly while personal real income levels flat lined. Although consumer spending increased, some experts attribute this uptick to the fact that many Americans who filed taxes early capitalized on their returns.

Based on today’s numbers, the economic forecast for the future isn’t too bright, said Peter Morici, an economist and professor at the University of Maryland’s Robert Smith School of Business.

“Although the inventory rebuild has begun, the pace is slow reflecting tepid sustainable demand for U.S. goods and services...Looking ahead, data are not encouraging. After such a long and damaging recession, we should expect several quarters of 5 percent growth but poor and mistargeted economic policies will force Americans to settle for less.”

House Republican Laments Timing Behind Release Of CMS Report

A report authored by the Centers for Medicare and Medicaid Services (CMS) showing that healthcare costs will increase under a newly passed reform law should have been released before the law was passed, said Rep. Bill Cassidy (R-La.) during a phone interview with Talk Radio News Service on Wednesday.

"I think it's a shame that the report was released after the vote; clearly it was important," Cassidy said. "It was, if you will, a damning indictment [of the legislation]."

The 38-page analysis conducted by the chief actuary at CMS, Rick Foster, concludes that healthcare spending will represent 21% of the country's Gross Domestic Product (GDP) by 2019. According to the report, that figure equals a 0.2% increase -- or $311 billion -- over the level that would be reached without reform in place.

During the nearly year-long debate over the legislation, the President frequently assured the public that his plan would bend the nation's healthcare cost curve down. But now, said Cassidy, Americans may start to lose faith in the administration's ability to be forthright.

"[The administration's] central premise was that they were going to lower costs," he said. "Now, integrity and faith in government are key things, trust in government is a key thing. If we're not gonna be able to trust them on this...what does that mean about other big policy decisions?"

Click here to listen to more of the Congressman's interview.

Wall Street Bill Will Receive Bipartisan Backing, Predict Democrats

By Laurel Brishel Prichard
University of New Mexico/Talk Radio News Service

Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.) predicted on Wednesday that Republicans that are retiring or up for re-election later this year will soon be changing their stances on Wall Street reform.

"We would love to see some bipartisanship on this bill," said Brown. "I think we will see it."

Brown added that certain Republicans are already beginning to change their minds about the legislation. As evidence, he cited the decision by Sen. Chuck Grassley (R-Iowa), who faces re-election this fall, to vote with Democrats in the Senate Agriculture Committee on a derivatives regulation bill.

"If you look at a list of what Republicans are up for re-election in 2010 you might correspond to bet who ends up voting procedurally to get this bill moving," said Brown.

$1.4 Trillion Lost Annually Due To Illness, Study Estimates

The lack of productivity that accompanies the onset of diseases and other health conditions may deprive the U.S. economy of $1.4 trillion annually, a new report sponsored by the Advanced Medical Technology Association concludes.

“It’s obvious that disease and productivity are intrinsically linked,” report contributor Bryan Luce of the United BioSource Corporation (UBC) said during a presentation Monday marking the reports’ release. “[Disease is] obviously important to GDP if it’s important to productivity.”

The report estimates that cancer is responsible for the loss of $306 billion in productivity with substance abuse detracting an additional $225 billion. The study also highlighted billions in losses from hypertension, heart disease, and mental problems.

The report’s contributors explained that the data shows the need for further investment in preventative treatment, arguing that an aggressive prevention program is needed.

“There is a rationale for a national program on the order of putting a man on the moon,” report contributor Greg de Lissovoy of UBC said. “Certainly health care reform and better access to care...will make a great contribution to this.”