The Shifting Sand of Numbers

Dean Baker wrote a Piece today, which is really worth the time to digest. He may be a little harsh in application of the numbers, but I basically agree with his assessment of 1% growth over the five Quarters. The main difference between Us may lay in the consideration of the importance of the slow growth. I find the slow growth to be the result of shedding inefficient enterprise, not necessarily a suppression of economic growth. Much, too much, economic expansion was created by the Bush Tax Cuts, and poor business planning and policy is finally being cut from the Production cycle. If my posit holds some validity, then it will additionally have value in countering Inflation. Restructuring will actually induce a better economic position for economic growth in the future. The trouble resides in the fact that I may be subject to simple wishful Thinking.

JP at The Capital Spectator tends to join myself in some wistful thinking, though he at least backs his ideation with some solid numbers. I do not share his bright opinion due to the fact I surmise (without heavy Checking of the Numbers) that most of the Consumer Spending gain come from Debt accumulation, while the Consumer Income gain came from Christmas season employment. Resolution of Christmas Retail numbers will tell the tale. Who you going to Call? Ghostbusters!

Menzie Chinn examines the Costs of Iraq, both the ‘burn’ rates and with the study of Reset Costs. The burn rates of maintaining a Force level in Iraq are reasonable, if We ignore the Cost additional of Press-ganging Troops to stay in the Service. The Reset Costs, though, remind of the immortal words "Iraq could never cost $100 billion!" Reset Costs must include the Cost of complete replacement of 70% of all Equipment at Brand-New pricing. Reset Costs will not be budgeted in at $8 billion per year either; think somewhere around 17% of new total equipment Cost. The longer the delay of the Bush administration to introduce these Reset Costs, the higher the yearly Cost will be, and the more equipment which will have to be replaced. lgl