Poll: Are US officials too optimistic about the economy?

[Winehole23]

Are Officials Too Optimistic About the Economy? (http://economix.blogs.nytimes.com/2009/02/26/down-with-optimism/)

By Catherine Rampell (http://economix.blogs.nytimes.com/author/catherine-rampell/) Are government officials being too optimistic about the country’s near-term economic health? Some seem to think so.


In testimony (http://www.house.gov/apps/list/hearing/financialsvcs_dem/galbraith022609.pdf) today before the House Financial Services Committee, James K. Galbraith, a University of Texas professor, asserted that the baseline forecast for the economy is too optimistic. He also said the stimulus bill was too small, the banking plan would not work and offered other gloomy insights (as well as some policy prescriptions, of course).



Early on in his statement, he even implied that the chairman of the Federal Reserve, Ben S. Bernanke, was an “unfounded optimist” regarding the likely success of current economic policy:
Chairman Bernanke, in his speech at London in January, said “the global economy will recover.” He did not say how he knows. And the truth is, this is merely a statement of faith. In present conditions the most dangerous position is that of the unfounded optimist. Those who use this position to defend a program of inaction, or of little action, or to defend a program of action that is geared to a forecast of automatic recovery, might possibly turn out to be right. There might be a deliverance. But to rely on that possibility in the design of policy is surely unwise.
Also today, The Wall Street Journal’s Real Time Economics (http://blogs.wsj.com/economics/2009/02/26/obama-budget-relies-on-rosy-economic-forecasts/) blog argued that the 2010 budget the Obama administration just announced was perhaps unrealistically rosy:
The famed Rosy Scenario, coined in the early days of the Reagan White House when large tax cuts and higher defense spending were assumed to be paid for in part by strong economic growth, is a cornerstone of the Obama administration’s first multiyear budget.


After contracting at a 1.2% rate in 2009, a more modest drop than the Congressional Budget Office and Blue Chip Consensus forecasts assume, the White House sees growth domestic product growth snapping back by 3.2% next year and then 4% or higher the three years after that.


The last time the economy performed that well was the New Economy heyday of the late 1990s.
Some analysts, including Brian Bethune at IHS Global Insight and Michelle Meyer at Barclays Capital, also wrote their clients that the budget’s projections seem overly sunny.



Wolf Blitzer, in a “Situation Room” interview with the Office of Management and Budget director, Peter Orszag, asked about whether the report contained “wildly optimistic, rosy scenarios.”



Mr. Orszag replied:
Well, Christina Romer, who chairs the Council of Economic Advisers, leads a team of professional economists who put together that forecast. One of the things that happens when you go through a very deep recession like we are now is that, as you emerge from the recession, the economy temporarily grows faster than normal just because your starting point is so low.
On the other hand, the Atlantic blogger Megan McArdle (http://meganmcardle.theatlantic.com/archives/2009/02/obamas_bigbath_accounting.php) writes that aspects of the 2010 budget were overly pessimistic, perhaps in order to allow the administration “to deliver upside surprises” later in the president’s term.

[DarrinS]

You know where I stand.

[Winehole23]

4th QTR US GDP is revised downward (http://online.wsj.com/article/SB123574078772194361.html?mod=googlenews_wsj) from -3.8 to -6.2.

[Winehole23]

You know where I stand.Candid.

Thanks for the kind reply.

WH23.

[LockBeard]

Considering they will collapse the country with all this entitlement spending. Yes.

[Winehole23]

For the record Wh23 unintentionally missvoted in his own poll, swelling the tally for too pessimistic. Wh23 does not regret the mistake.

[Extra Stout]

To those who think the government is too pessimistic: I promise not to say "I told you so" when you come asking me for some of my canned food.

[Winehole23]

urp

[BradLohaus]

After contracting at a 1.2% rate in 2009, a more modest drop than the Congressional Budget Office and Blue Chip Consensus forecasts assume, the White House sees GDP growth snapping back by 3.2% next year and then 4% or higher the three years after that.

The last time the economy performed that well was the New Economy heyday of the late 1990s.

"One of the things that happens when you go through a very deep recession like we are now is that, as you emerge from the recession, the economy temporarily grows faster than normal just because your starting point is so low."

A one year contraction of 1.2% is a "very deep recession"? Expect even greater manipulation than usual in future government statistics.

http://www.shadowstats.com/

[Winehole23]

A one year contraction of 1.2% is a "very deep recession"?Hmm. I see what you mean. That was unintentionally funny. I had no idea the projected downside was so modest and gentle until you brought it to my attention.

In my own mind I guess I was already sketching in the possibilities somewhere between the official lie and the rumored one.


Expect even greater manipulation than usual in future government statistics.

http://www.shadowstats.com/Uh-huh.

Thanks for the link. Is the subscription worth it?

[Marcus Bryant]

We're f'd.

[Winehole23]

An early trend favors black bile and survivalists.

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View Poll Results: Are US officials too opimistic or pessimistic about the economy? Too optimistic. http://www.spurstalk.com/forums/images/polls/bar2-l.gifhttp://www.spurstalk.com/forums/images/polls/bar2.gifhttp://www.spurstalk.com/forums/images/polls/bar2-r.gifhttp://www.spurstalk.com/forums/clear.gif 5 38.46% Too pessimistic. http://www.spurstalk.com/forums/images/polls/bar3-l.gifhttp://www.spurstalk.com/forums/images/polls/bar3.gifhttp://www.spurstalk.com/forums/images/polls/bar3-r.gifhttp://www.spurstalk.com/forums/clear.gif 2 15.38% As optimistic as the circumstances will allow; sober and levelheaded. http://www.spurstalk.com/forums/images/polls/bar4-l.gifhttp://www.spurstalk.com/forums/images/polls/bar4.gifhttp://www.spurstalk.com/forums/images/polls/bar4-r.gifhttp://www.spurstalk.com/forums/clear.gif 2 15.38% Don't know. http://www.spurstalk.com/forums/images/polls/bar5-l.gifhttp://www.spurstalk.com/forums/images/polls/bar5.gifhttp://www.spurstalk.com/forums/images/polls/bar5-r.gifhttp://www.spurstalk.com/forums/clear.gif 0 0% Too busy preparing my family's survival bunker. http://www.spurstalk.com/forums/images/polls/bar6-l.gifhttp://www.spurstalk.com/forums/images/polls/bar6.gifhttp://www.spurstalk.com/forums/images/polls/bar6-r.gifhttp://www.spurstalk.com/forums/clear.gif 4 30.77%

[Winehole23]

Polling reflects 3/4 Eeyore and survival guy, 1/4 Pollyanna and head-in-sand at the timestamp below.

[boutons_]

We should assume the worst.

The huge sector of the banking system is bankrupt.

I'm pessimistic that Magik Negro's plans will be able to dislodge the control over our lives that the corps and financial sectors have. Those vested interests have enormous power (aka $$$) to main their grip on us, fully and reliably supported by the 100% of Repug whores and a fair number of Dem whores. Actually, Congress is part of the plutocracy/kleptocracy fucking us all over, with taxpayers picking Congress' free-for-life 5-star health coverage and exorbitant pensions.

Although the predictors now are the same predictors earlier who failed to predict (in pulbic) where we are now, they're saying 2009 is a lost cause, and AT LEAST well into 2010.

The Magik Negro has his description of the future just about right.
"It's going to be tough for probably a long time, but the US wil recover" ... with NO help from the Repugs, who will do everything, which of course includes their reflexive lying, to keep the US fucked until 2010 elections and beyond.

[Winehole23]

We should assume the worst.

The huge sector of the banking system is bankrupt.Are you sure you assumed the worst? I ask because you segued into a magic negro fugue, and then you fussed over the monkeyshines of the GOP.


I'm pessimistic that Magik Negro's plans will be able to dislodge the control over our lives that the corps and financial sectors have. Those vested interests have enormous power (aka $$$) to main their grip on us, fully and reliably supported by the 100% of Repug whores and a fair number of Dem whores. Actually, Congress is part of the plutocracy/kleptocracy fucking us all over, with taxpayers picking Congress' free-for-life 5-star health coverage and exorbitant pensions.I used to not be moved by this sort of analysis, but it's much more appealing to me now. Better the whole country should default than a single megabank, or that our elected representatives should be asked to stint for any comfort.


Although the predictors now are the same predictors earlier who failed to predict (in pulbic) where we are now, they're saying 2009 is a lost cause, and AT LEAST well into 2010.Banks are still insolvent. Are you sure you assumed the worst?



"It's going to be tough for probably a long time, but the US will recover" ... How long is a long time? In your opinion.

How long does it take to consolidate the US banking system?

[Wild Cobra]

The only good thing right now is I'm buying into my 401k at 50%! I'm getting a two-for-one on my retirement!

[Winehole23]

The only good thing right now is I'm buying into my 401k at 50%! I'm getting a two-for-one on my retirement!Investing into the teeth of the storm. Bold, WC.

[Winehole23]

The DK tally is zero. Typical. :lol

[Ignignokt]

you guys are buttwipes, we're fine.

[TDMVPDPOY]

dude if the govt starts to think pessimistic, that will just shit up everything the govt has been trying to do, keep the economy afloat with the stimulus, but it looks like it aint working, so prepare for the worst to come....what they dont need now is the consumers to stop aggregate demand and spending in the economy....

[Winehole23]

....what they dont need now is the consumers to stop aggregate demand and spending in the economy....Too late, TDMVPDPOY. GDP was down 6.2 in the 4th qtr. The US savings rate recently reached a seven year high (http://www.thesunsfinancialdiary.com/charts/personal-savings-rate-reached-7year-high-chart-day/).


http://farm4.static.flickr.com/3395/3251516529_9016057a51_o.png (http://www.flickr.com/photos/28415940@N07/3251516529/)

[TDMVPDPOY]

Cant wait what the aus reserve bank is going to announce sometime this week, maybe another 25 basis points interest rate cut :D......im still holding out till probably next year to see if the economy is still tankn and house prices continue to tank....

FHOG aka first home owners grant runs out end of this financial year in australia we had it for 2-3yrs now...wanna see the impact it will have on house prices when removed

[Winehole23]

Cant wait what the aus reserve bank is going to announce sometime this week, maybe another 25 basis points interest rate cut :D......Ah, monetarism. Australian reserve bank still has some string to play with.

Those were the days.

http://www.moneycafe.com/library/ratecharts/ratecharts17.gif

[LnGrrrR]

Boy, we're a pessimistic bunch on this board! (Myself included.)

[LnGrrrR]

Investing into the teeth of the storm. Bold, WC.

I did the same thing by starting up my government TSP. I can't imagine stocks can drop THAT much more... right?

[TDMVPDPOY]

Ah, monetarism. Australian reserve bank still has some string to play with.

Those were the days.

http://www.moneycafe.com/library/ratecharts/ratecharts17.gif

too bad the big4 banks down here are wankers when it comes to complying the recommendations from the reserve......so far they are doing well though, even with shit low forecasts, a profit is always profit, better than no profit.

[Winehole23]

I did the same thing by starting up my government TSP. I can't imagine stocks can drop THAT much more... right?Get out of equities for the next two years is the Jim Cramer advice. Let that sink in. Mad Money guy said get out and get cash positions. For two years.

[TDMVPDPOY]

Get out of equities for the next two years is the Jim Cramer advice. Let that sink in. Mad Money guy said get out and get cash positions. For two years.

yeh keep cash if ur not going to invest, just wait if this shit gets more shitter, then certain investments you been eyeing to purchase could become a bargain.....like a property or someshit since prices continue to fall....

[SnakeBoy]

Too late, TDMVPDPOY. GDP was down 6.2 in the 4th qtr. The US savings rate recently reached a seven year high (http://www.thesunsfinancialdiary.com/charts/personal-savings-rate-reached-7year-high-chart-day/).


http://farm4.static.flickr.com/3395/3251516529_9016057a51_o.png (http://www.flickr.com/photos/28415940@N07/3251516529/)


Your chart doesn't cover a large enough time frame to show where we are headed. We'll get back to 7-8%. The contraction (err..correction) is just getting started.

http://homepage.mac.com/ttsmyf/PersSavDB.gif

[Winehole23]

The contrast with the debt spike is illuminating, SnakeBoy. Nice.

[TDMVPDPOY]

oi snakeboy

thats because you got the jones wannabes spending more than what they earn....doesnt help when you have easy money from plastic cards which can fuckup personal debt if not managed properly. I see a majority of that debt could be in the form of student loans or mortgage loans debt.....

[Wild Cobra]

Investing into the teeth of the storm. Bold, WC.
Buy low, sell high...

[Winehole23]

WSJ: 20% chance (http://online.wsj.com/article/SB123612575524423967.html) of a depression.

[LnGrrrR]

WH23, I don't make enough money (active duty military) to worry aobut losing all my cash... just taking a small, relatively safe bet.

And Cramer can kiss my ass :)

Besides, I'm military, so if stuff really hits the fan, I'm on the side with guns... lol

[Winehole23]

WH23, I don't make enough money (active duty military) to worry aobut losing all my cash... just taking a small, relatively safe bet.

And Cramer can kiss my ass :) WH23 endorses this sentiment.


Besides, I'm military, so if stuff really hits the fan, I'm on the side with guns... lol:lol

[Winehole23]

We'll get back to 7-8%. It's already at 5% (http://paul.kedrosky.com/archives/2009/03/02/january_us_savi.html).

[TDMVPDPOY]

It's already at 5% (http://paul.kedrosky.com/archives/2009/03/02/january_us_savi.html).

we going backwards down here atm....govt still trying to sugarcoat to avoid recession......cant avoid it when other countries are in recession, and australia relies to much on its exports for trade :(:(....i doubt any other fukn westernize country produce domestically anymore....fkn outsourcing bitches

[Winehole23]

we going backwards down here atm....govt still trying to sugarcoat to avoid recession......cant avoid it when other countries are in recession, and australia relies to much on its exports for trade :(:(.Sugarcoat? That seems familiar.