The better than expected GDP news will have a lot of people assuming that the worst is over. We’re even cheered by the numbers, which appear to show the economic growth has resumed and is stronger than ever.
But we know a lot of our readers think that the economy is still limping along. For many of you, the people celebrating this GDP report are just fools who will get taken to the cleaners by the market. Some things we’ve already heard.
- It’s the up leg of a W shaped recovery: Sure GDP shot up. But we’re headed for a big drop before things start to really grow.
- It’s all artificial, government debt, stimulus-based, cash-for-clunkers, home buyer credit growth: The genuine, market based economy is still a basket case. Right now we’re running fumes, high from too much stimulus that is fooling us into thinking the economy is better.
- We’re still buried under a mountain of debt, and we’re digging deeper. Before the downturn, the problem was that the American people were buried under too much debt–household debt, consumer debt, business debt. The healthy pull-back in indebtedness has been sidelined by the huge growth of government debt, which means we’re making things worse not better.
- It’s another loose-money economic bubble created by the Fed. The central bankers may believe they’ve engineered an economic recovery, but all they’ve done is encouraged another economic bubble rife with mal-investment. The eventual reckoning will be far worse.
So we’re opening up the comments to those of you who want to explain to the rest of us why the GDP number isn’t really good news. We’ll put the very best comments up later today as their own post.