US Economy Has “Hardly Grown at All” in Last 5 Years

US Economy Has “Hardly Grown at All” in Last 5 Years

US Economy Has “Hardly Grown” at All in Last 5 Years

$DIA, $SPY, $QQQ, $VXX

US economic growth has essentially stalled in the last 5 years under President Barack Hussein Obama.

“A necessary condition for economic growth is that output per hour grows at a rate probably close to 2 percent. We’re now under 0.5%, meaning we’re essentially for the last 5 years have been growing hardly at all,” Alan Greenspan said in a TV interview Friday.

“”If you don’t get output per hour growth, you will not get the type of GDP growth which the people who are talking about it, ‘we can now grow our way out of it,’ unless you change the fact that we’ve got this 9 percent average annual increase in entitlements, which is eating into the domestic savings of the economy, which in turn is a critical issue, which is required to get capital investment going and capital investment is the key element in productivity growth,” he said.

“So it’s this entitlement issue, which nobody wants to discuss. The Democrats don’t want to discuss it, the Republicans who actually have been spending more and faster rate than the Democrats in the last half century, nobody wants to touch it. It’s the third rail of Americana politics,” he said.

 

“If you’re running for office and you mention it, you lose. Unless and until that issue is addressed, I don’t see we get the economy growing because we’re borrowing savings from abroad, we’re now up to $8-T debt net for the total system. You can’t keep doing that and I doubt very much if we’re going to be able to do very much more borrowing from abroad and if we can’t do that and we don’t have domestic savings because it’s being crowded out by entitlements, where do you go from there?” he said.

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“It’s a nice idea to say, well we’ll build our way out of it. Good luck.”

US President Elect Donald Trump has said that Barack Hussein Obama has been “the 1st president in modern history not to have a single year of 3% growth.”

You can wonder about whether this is fair, but if you consult the Bureau of Economic Analysis’s statistics on annual GDP (gross domestic product growth), which go back to Y 1930, it is true that there was at least one year of at least 3% growth during every Presidency until the Obama years. And though Y 2016 is not done yet, it will take a spectacular Q-4 to get growth over 3% for the year.

America is stuck in this economic depression because of Alan Greenspan’s Fed policies, and the continuing reverence to them.

The recovery cannot start until his legend dies, and with it all the confusion and misconstruction about how markets and the economy actually work.

Expect President Donald Trump to dump Fed Chairwoman Janet Yellen and at least 3 current Fed governors and get on with Making America Great Again.

Thursday, the US major stock market indexes finished at: DJIA +59.71 at 19852.24, NAS Comp +20.18 at 5456.85, S&P 500 +8.75 at 2262.03

Volume: Trade was heavy with 1.17-M/shares exchanged hands on the NYSE

  • Russell 2000 +20.2% YTD
  • DJIA +13.9% YTD
  • S&P 500 +10.7% YTD
  • NAS Comp +9.0% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.41) Bullish (0.31) Very Bullish (0.56) Bullish (0.35)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.30) Bullish (0.37) Neutral (0.17) Bullish (0.35)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.36) Bullish (0.35) Bullish (0.38) Bullish (0.36)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Very Bearish (-0.51) Bearish (-0.42) Bearish (-0.42) Very Bearish (-0.71)

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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