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State Spending Cuts Slow Economic Growth In Final Months Of 2010

February 28, 2011 by  

State spending cuts slow economic growth in final months of 2010New data from the United States Commerce Department reveals that the economy grew at a slower rate than experts had originally predicted for the fourth quarter of 2010.

On Feb. 25, the agency reported that the gross domestic product (GDP), which represents economic growth, increased at an annual rate of 2.8 percent in the final quarter of last year. This figure was lower than its initial estimate of 3.2 percent.

Deep budget cuts by State and local governments contributed to the sluggish pace by slashing spending at a 2.4 percent rate between October and December 2010. In addition, consumer spending rose at a rate of 4.1 percent, which is smaller than the original estimate of 4.4 percent.

"There are still signs the recovery is taking root, and it appears sustainable, but not strongly enough to significantly lower unemployment," Scott Brown, an economist at Raymond James, told Forbes.

State budgets and the economy were slated to be major topics at the National Governors Association's annual winter meeting this past weekend in Washington, D.C. President Barack Obama was scheduled to meet with Democratic governors on Feb. 25 to discuss job creation, then host bipartisan events on Feb. 27 and Feb. 28. 

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  • coal miner

    By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer
    WASHINGTON – A tax cut that began last month gave consumers the biggest jump in their incomes in nearly two years. But Americans boosted their spending only slightly, a sign that many people are uncertain about the strength of the economy.

    The Commerce Department says that consumers increased spending 0.2 percent in January, the smallest gain since June. Personal incomes jumped 1 percent, reflecting the 2 percentage point reduction from the Social Security tax cut.

    The small spending gain pushed total spending to $10.59 trillion at an annual rate in January, up 7.4 percent from the recession low hit in December 2008. Economists are counting on spending to continue increasing this year to provide support for the economic recovery.

  • eddie47d

    If States are cutting budgets and creating more unemployment and banks aren’t loaning out money then what else would there be but a slower rate of growth. With the Federal Government trying to cut programs and reduce the deficit there isn’t much room for job creation.We should feel “lucky” there isn’t more unemployment.

    • Bruce D.

      I can understand why you feel “lucky”. You are retired and not looking for a job. Others are not so “lucky”.

      • Linda R

        According to the Constitution of the United States of America, Article 2, Section 1, “No Person except a “Natural Born Citizen”, or a Citizen of the United States, at the time of the signing of this Constitution, shall be eligible to hold the Office of President.

        “Whereas, We the People contend that Barack H. Obama, AKA Barry Soetoro, has failed to meet the requirement necessary to hold the office of President of the United States of America;

        Who has introduced Facism in the form or more than one thousand czars to rule over us ? Who has denied facets of our American Constitution ? Who pretends to be a Christian, but was educated in Jakarta, Indonesia, a Moslem country ?

        White House assertions to the contrary notwithstanding, the proposed Obama budget raises taxes, adds more debt and hikes federal spending.

        • Libertarian

          what else can be added there?

          The “rulers” of this country came out in the open under the Bush administration; 1) stealing the 1st election and defrauding the 2nd, 2) perpetrating the BIGGEST wealth transfer in the US history from the poor & middle class to the rich, thus making them ULTRA-rich, 3) being involved in the “New Pearl Harbor”, on 9/11, required for cover up of the 2.3 trillion $ Pentagon was unable to account for(!), 4) rewarding the criminal behaviour of banksters by massive Wall Street bail-outs and 5) installing their own man (Barry Soetoro) to carry out the rest of the plan, i.e.: New World Order!

          The ONLY hope this country has is to: 1) elect Ron Paul, or a BRAVE SOUL like him, 2) get rid of the Federal Reserve, 3) prosecute the criminals responsible for the 9/11 “New Pearl Harbor”, including the mass media! showing us fake images of cartoon plane EATEN by buildings & keeping us in fear of a non-existent entity, 4) repeal ALL fascist laws passed by Bush and kept by Soetoro, i.e.: “Patriot Acts”,etc, 5) deal once and for all with the Military Industrial Complex (Carlyle Group and the Pentagon have not suffered ANY recession!) and 6) allow the suppressed technologies for civilian use, such as: FREE ELECTRICITY made possible by TESLA close to 100 years ago, etc.

          This might seem like an ambitious plan, but believe me, it is not.

          • Bruce D.

            You are not stealing an election when one person gets more votes than the other. That has been verified by independent sources so stop lying.

          • Bruce D.

            As pertains to Florida. I should not have used the word lying as you may just be misinformed.

          • http://?? Joe H.

            I hate to say it, but if they elect Ron Paul, they better elect TWO like him! Look at the past history of leaders that have been for getting rid of the fed!!! Those ba$tards don’t fool around!!

          • get right

            libertarian, not Ron, as he has changed his mind on womens rights. Bruce doesn’t keep up on what the court ruling was in Fl, you can tell by his response to you. Like most of your ideas.

    • eddie47d

      “we” as a country Bruce or are you always thinking of yourself?

      • get right

        eddie, he is a repub, who else would he be thinking of other than himself??

  • Raggs

    Consumer spending rose to 4.1%… Well lets see what that looks like mid-summer when gasoline is over $5 a gallon and food prices are up by 10% or more… While we are at it lets throw in a higher unemployement rate…

    • 45caliber

      I’ve never figured out those percentages of theirs.

      They state that consumer spending went up 4.1% or so – but I’m still spending all my paycheck. How can it go up without me getting a raise? Or does that mean someone else (probably working for the government) got my raise as well as his?

    • http://?? Joe H.

      Its all gonna be alright!! Nobummer let the first deepwater drilling permit be issued today since the horizon incident!! now if we could only get him to let them drill elsewhere!! $5.00 a gallon might look peachy before they are done with us!!!

  • s c

    America’s economic chickens are coming home to roost. Gas prices are exploding, and we’re expected to shut up, smile and give thanks for having the best government that money can buy.
    Nope. I won’t do it. By the way, progressives [and your iconic role models], thanks ever so much for the latest gas prices. In case you don’t remember, America’s working POOR will feel it more than the rest of us.
    Aren’t THOSE the ones who are supposed to benefit the most from your leadership and your
    compassion and your never-ending superior wisdom? Thanks for NOTHING, you worthless schmucks.
    Excuse me while I pass some unwanted ‘gas’ in your direction. You and your political gods will be the death of America. You and Gore and the rest of you two-legged, useful idiots need to be elsewhere. We don’t need any enemies when we have generations of ^#$!$%^& like YOU.

    • Macawma

      Well said, sc.

    • 45caliber

      The Democrats always take care of their poor. Right?

      A large majority of the victims of murders, etc. are the poor. And guess who it is that wants to make guns and ammo too expensive for the poor to acquire?

      • http://?? Joe H.

        Well if they are poor and suffering, they might rise up against them if they could get guns!!! They couldn’t allow THAT, now could they???

  • 45caliber

    A lot of progressives are against domestic oil drilling because “it would take 10 years to get it on the market and that won’t help our problems now.”

    Well, it would help some now by getting more people to work drilling for oil. And it will certainly help in ten years. Not doing anything now will accomplish nothing now or in ten years.

    • Raggs

      Sounds like the plan to me…

      • http://?? Joe H.

        Let’s see a couple of permits for new refineries that aren’t n the same general area as the others as well! That way, when weather shuts down the major ones, it could be made up by the new ones. That way, gas won’t soar every time hurricane hits the gulf!!

        • bob wire

          well it don’t take near that long.

  • LES

    Moratorium on oil drilling plus possible overseas supply interruptions are going to drive gas prices up.
    Cap & Trade are going to drive electric prices up.
    Converting large amounts food to fuel are going to drive food prices up.

    People are going to have to put so much more money into the basic necessities that will leave little left over to purchase goods to make the economy grow. This fact alone make economy recovery slow.
    The government may be borrowing and printing money for growth but they are doing even more damage by their policies designed to slow growth.

  • Dan az

    A bit off topic but I thought it fit the times.
    A young woman was about to finish her first year of college. Like so
    many others her age, she considered herself to be a very Liberal
    Democrat, and among other liberal ideals, was very much in Favor of
    higher taxes to support more government programs, in other Words
    redistribution of wealth.

    She was deeply ashamed that her father was a rather staunch
    Republican, a feeling she openly expressed. Based on the Lectures that
    she had participated in, and the occasional chat with a professor, she
    felt that her father had for years harbored an evil, selfish desire to
    keep what he thought should be his.

    One day she was challenging her father on his opposition to Higher
    taxes on the rich and the need for more government programs. The
    self-professed objectivity proclaimed by her professors had to Be the
    truth and she indicated so to her father. He responded by Asking how
    she was doing in school.

    Taken aback, she answered rather haughtily that she had a 4.0 GPA, and
    let him know that it was tough to maintain, insisting that She was
    taking a very difficult course load and was constantly studying, which
    left her no time to go out and party like other people She knew. She
    didn’t even have time for a boyfriend, and didn’t really have many
    college friends, because she spent all her time studying.

    Her father listened and then asked , ‘How is your friend Audrey
    doing?’ She replied, ‘ Audrey is barely getting by. All she takes are
    Easy classes, she never studies, and she barely has a 2.0 GPA. She Is
    so popular on campus; college for her is a blast. She’s always invited
    to all the parties and lots of times she doesn’t even show up for
    classes because she’s too hung over.’

    Her wise father asked his daughter, ‘Why don’t you go to the Dean’s
    office and ask him to deduct 1.0 off your GPA and give it to your
    friend who only has a 2.0. That way you will both have a 3.0 GPA, and
    certainly that would be a fair and equal distribution of GPA.’ The
    daughter, visibly shocked by her father’s suggestion, angrily fired
    back, ‘That’s a crazy idea, how would that be fair! I’ve worked really
    hard for my grades! I’ve invested a lot of time, and a lot of hard
    work! Audrey has done next to nothing toward her degree. She played
    while I worked my tail off!’

    The father slowly smiled, winked and said gently, ‘Welcome to The
    Republican party.’

    If anyone has a better explanation of the difference between
    Republican and Democrat I’m all ears.

    If you ever wondered what side of the fence you sit on, this is a great test!

    If a conservative doesn’t like guns, he doesn’t buy one.
    If a liberal doesn’t like guns, he wants all guns outlawed.

    If a conservative is a vegetarian, he doesn’t eat meat..
    If a liberal is a vegetarian, he wants all meat products banned for

    If a conservative is homosexual, he quietly leads his life.
    If a liberal is homosexual, he demands legislated respect.

    If a conservative is down-and-out, he thinks about how to better his situation.
    A liberal wonders who is going to take care of him.

    If a conservative doesn’t like a talk show host, he switches channels.
    Liberals demand that those they don’t like be shut down.

    If a conservative is a non-believer, he doesn’t go to church.
    A liberal non-believer wants any mention of God and religion silenced.
    (Unless it’s a foreign religion, of course!)

    If a conservative reads this, he’ll forward it so his friends can have
    a good laugh.
    A liberal will delete it because he’s “offended”.

    • bob wire

      as soon as this “friend” was introduced, I knew where you were going Dan.

  • chuckb


    the last i heard it would not take ten years. if they opened up the fields now you would see an immediate drop in price and we would see oil production in less than half that time. barry and the enviros don’t want cheap oil they are pushing for their day dream cars that will operate between elec. outlets, recharge every forty miles.

    this current price hike has no basis, there’s no interruption in supplies, but, some are making a killing on the commodities market like pers, unions to name a couple, barry does know one thing, he knows how to accommodate his friends and those who contribute to the king.

    • http://?? Joe H.

      It’s all part of their protection plan! If you want to assemble now, all you do is go to the gas station and fill up! If you can do that, it would be easier to attempt to throw off your chains. When you have to recharge, all they have to do is flip a switch and they got you under their thumb!!!

    • 45caliber

      I’ve ridden in an electric car that would get over a 300 mile range on a single charge on 6 standard car batteries. It also got over 65 mph on the road. GM bought out the company that created it back about 1975 or so. When is the last time you’ve heard of that car?

  • bob wire

    This slow down in state spending and growth represents all that “stimulus money” that DIDN’T WORK! It’s all but gone by mid summer 2011. ~

    So when it really does quit working, ~ somebody need to pull a rabbit out of their hat.

    It bought time, time is money, ~ we are some better but running out of time.

    • http://?? Joe H.

      Well over half that money is still sitting in banks! nobummer doesn’t WANT it to work or he would put it towards the debt!!!

  • chuckb

    joe h

    that’s re-election money. you will see it show up next year and give the economy a little shot in the arm to provide the pawns a little hope things are getting better.

  • http://com i41

    We just delivered 3 rock saws up to SD to cut thru the fost to set down some more drilling rigs in SD and going up into ND. There is more shut off oil wells every week that are ready to be opened up and to be used to sell on open market or refined. What sorry bastards are stopping things from progressing. Ol jug aers and his lap b–ches of the EPA, there isn’t a dumbocrat or rino that will make a peep. Either these tenured Congress pukes are in the the bed rolls of the Chinese or there is a the UN. Even the Sen. and Congress claimed the Chinesse didn’t now own the largest uranium mine in the world in WYO. It is over by Casper and the Shirely Basin was used for over 3 decades, and when shut down there was still over 150 yearts of uranium that never had it’s vein dept and range pinpointed. Since China is going to put in 20+ nuke power plants in 5 years, where it takes USA 30-40 years. USA should have been selling the product not the land and mine to the Chinese, now what simple minded dumb bastards came up with the plan. The beltway idoit soros socialist democrats, Onumnutts, and all the other book educate simpleminded peices of crap that supportted Onumnutts and dumbocraps.


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