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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsAnalysis: Morning in America? U.S. Economy Poised To Accelerate
WASHINGTON | Mon Feb 25, 2013 3:25pm EST
(Reuters) - Famed U.S. economist Milton Friedman once observed that a recovery from recession is like plucking a guitar string: The harder the economy is pushed down, the faster it snaps back.
That didn't happen when America began to exit a deep downturn in 2009. Now, though, after years of paltry growth and despite a government austerity drive that could batter the economy for months, signs are emerging that a more robust recovery is around the bend.
The main reason is an improvement in household finances, which by some measures are looking more solid than they have in decades. This is allowing consumers to ramp up purchases of homes and cars, the sort of spending that usually leads an economic rebound but that until recently had been held back by heavy debts and tight credit.
"We finally are getting something that looks more like a normal recovery," said Nigel Gault, an economist at IHS Global Insight in Lexington, Massachusetts.
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http://www.reuters.com/article/2013/02/25/us-usa-economy-growth-idUSBRE91O14620130225
Dawson Leery
(19,348 posts)Jackpine Radical
(45,274 posts)Any opinion piece that starts out with homage to "famed economist Milton Friedman" is suspect from the first paragraph. This is hype trying to squeeze some more consumer spending out of the economy. It's about as trustworthy as Jim Cramer touting stuff he shorted on.
The 99% are still hurting. Sure, a few are buying new cars etc. because they've delayed the purchase as long as possible, the family junker is no longer drivable, used cars are ridiculously expensive, and the banks will give you a better interest rate on a new purchase than on an inflated "pre-owned" trashmobile.
The sequester will be to the economy what the torpedo was to the Lusitania. Bank on it.
AnotherMcIntosh
(11,064 posts)famed Judge Posner has acknowledged that.
As otherwise noted in another IHS Global Insight report,
http://usmayors.org/pressreleases/uploads/2012/MetroEconomiesReport_011812.pdf
John Maynard Keynes and New Deal Democrats were right. Milton Friedman and his I've-got-mine-crowd were and are wrong.
On the Road
(20,783 posts)corporations are sitting on a ton of cash. That cash will surge back into the economy at some point. Looks it will be fairly soon.