The Non-Goldilocks Economy

Tepid: Not too hot, not too cold, but not "just right" either.

In the short term, politics may dominate economics. But over time, economics dominates politics.

   Experts are suggesting "modest" growth for the American economy through next year, even as Democrats struggle to boost activity and Republicans move to block. In the latest analysis from an independent source, the International Monetary Fund (IMF) says the U.S. recovery "has remained tepid, with GDP growing at a modest 2.2 percent for 2012. And despite "powerful headwinds, the nature of the recovery appears to be changing." Whatever that means.
   So is the U.S. economy recovering or not?
   There will be growth for the year, at 1.7 percent, the IMF predicted, but that's less that last year's 2.2 percent. And even an accelerated growth to 2.7 percent next year is not like going gang-busters.
   Moreover, while the IMF executive board said it welcomes "improvement in the underlying conditions of the U.S. economy, which bodes well for a gradual acceleration," the balance of risks "remains tilted to the downside."
   Which is a diplomatic way for the Washington-based institution to say, "Watch your butt."

   Meanwhile, the unemployment rate in Spain declined during the second three months of the year to 26.3 percent, compared to a record 27.2 percent in the first quarter. In Germany, the engineering giant Siemens cut its profit prediction for its next fiscal year, which begins in September. The company has already taken a 7 percent hit in sales in this year's first quarter.
   The unemployment rate in America is still above 7 percent, and people over 50 who have been out of work are struggling even longer to find a new job. The GOP continues to hammer at what they see as President Obama's failure to kickstart the economy, citing a 7.6 percent jobless rates, 11.8 million people out of work, another 8.2 million forced to work part-time, and the statistic that the average duration of unemployment has almost doubled from 19.8 weeks to 35.6 weeks.
   Their proposed solution measures: Repeal the health care act known as Obamacare (you know, the health care plan modeled on the one known as Romneycare in Massachusetts), give parents more influence over schooling, devise a flatter tax code, cut government spending and balance the federal budget, foster innovation by keeping the internet free of government regulation, tighten border security and rein in government red tape. Source here is the House Republican Plan for Economic Growth, at http://www.gop.gov.jobs/.
   For their part, Democrats point out that "Our economic troubles did not come about overnight and we will not be able to fix them overnight." To jumpstart the American economy, Dems say they will be "focusing on fiscal responsibility and making targeted investments in the areas that will grow our economy like clean energy, education, health care and infrastructure." Source: http://www.dems.gov/issues/economy.

   So both sides seem to have a plan, and both claim theirs is the best and only workable plan. Meanwhile, as they fiddle, Rome, Athens and Paris burn. That's Rome, Georgia; as well as Athens, Texas; and Paris, Tennessee.