[R-G] [BillTottenWeblog] Drifting Downward

[Bill Totten]

The Deflating Economy

by Mike Whitney

BCounterPunch (July 13 2009)


There should be a modest uptick in GDP in either in the fourth quarter
2009 or the first quarter 2010. This will mark the end of the current
twenty month-long recession, but not the end of the crisis. The blip in
growth doesn't mean that the troubles are over or that the economy is
on the way to recovery. It simply means that Obama's $787 billion
fiscal stimulus is beginning to kick in, giving a boost to consumer
spending and generating short-term economic activity. Regrettably, when
the stimulus runs out, the economy will slide back into negative
territory. That's because the US consumer has crossed an important
threshold and no longer has the ability to drive the economy through
debt-fueled consumption. The data indicates a critical change in
consumer behavior which portends a shift away from the current model
for economic growth. It's a whole new ballgame.