Saturday, January 29, 2011
Choices are difficult
Quarterly GDP figures came out this week for the UK and the US. Our GDP grew--not a lot but still enough to show that the economy is improving. Their GDP fell. The British equivalent of the Tea Party took over last year and imposed an austerity budget. Was it the right thing to do? What comes next? This editorial in the Financial Times does a nice job of highlighting the public and private choices that will need to be made. I can almost see possible paths to various points on their production possibilities frontier.
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I couldn't access the editorial because I am not a member of the Financial Times. It is good to hear that our GDP grew, although it doesn't sound like it grew much. I suppose we can expect our GDP to fall in the coming years with our freeze on spending since the UK's GDP decreased after they imposed an austerity budget. Obviously there are other factors but I imagine the budget restrictions had a lot to do with it.
ReplyDeleteI also couldn't open the editorial. To be completely honest I'm shocked that our GDP grew, but I think it may shed some light for us right now. (considering all the problems we've talked about with our government). I think Dave is right, the freeze on spending will probably drop our GDP over the next couple of years.
ReplyDeleteSorry to repeat, but yes I can't see the editorial. I am not totally surprised that our GDP has increased over the last quarter. The Dow Jones has been increasing for the last few quarters now, approaching 12000. It was down yesterday, but it has been rising ever since we dropped below 10000 in 2007-2008. Usually this is a sign that companies are recovering and profits are starting to come around again, which is good news for the United States. Hopefully we can keep on this track until we can recuperate some money in the market.
ReplyDeleteYup the article requires you to be a member, I didn't see it either.
ReplyDeleteGDP growth is better than a decline, it may not mean much in terms of actually finances if it's not a huge growth, but for the American people green ink can be looked at as a sign of hope for the economy and progress in Washington.
Ditto on not being able to see the article. It is definitely good to hear that our GDP has grown, suggesting that our economy is improving. I think the freeze on spending and potential budget cuts could force our GDP to decline similar to the UK's, but I think it is a necessary step in order to lower our country's debt. It may hurt us in the short-run, but will be an important step in saving our country's credibility which will help us in the long-run.
ReplyDeleteI took the time to register and check out the article but it seems to be more geared toward politics than finance. I was also under the impression that the title may have been more dramatic than the reality and the UK is expected to bounce back in the near future, which is reassuring to hear.
ReplyDeleteIt's a little discouraging to hear that the general momentum of our economy may look poor in the short run, but it's good to hear that we're now taking a step in the right direction. I think that attitude perpetuates action, and as people regain thier confidence in our economy, a possitive pattern will follow suit.