US Economy Accelerated at a Solid 6.5% Rate Last Quarter

[Paco Dennis]

"Fueled by vaccinations and government aid, the U.S. economy grew at a solid 6.5% annual rate last quarter in another sign that the nation has achieved a sustained recovery from the pandemic recession.
Thursday’s report from the Commerce Department estimated that the nation’s gross domestic product — its total output of goods and services — accelerated in the April-June quarter from an already robust 6.3% annual growth rate in the first quarter of the year. The quarterly figure was less than analysts had expected, but the economy was likely held back mainly by supply shortages in goods, components and labor.
For all of 2021, the economy is expected to expand about 7%. That would be the strongest calendar-year growth since 1984. And it would mark a sharp reversal from last year’s 3.5% economic contraction — the worst in 74 years — as a result of the pandemic.
Yet overhanging the rosy economic forecasts is the possibility of a resurgent coronavirus in the form of the highly contagious delta variant. The U.S. is now averaging more than 60,000 confirmed new cases a day, up from only about 12,000 a month ago. Should a surge in viral infections cause many consumers to hunker down again and pull back on spending, it would weaken the recovery."

Movin' on Up

 

[Don M.]

I'm amazed that the economy...especially the stock market....hasn't taken a major nosedive as a result of this Virus. There's been some short pullbacks in the past year, but the recovery seems to quickly follow.

If this current spike in those getting ill causes another round of lockdowns, etc., we could easily see even more volatility in coming weeks, or months.

 

[oldman]

I'm amazed that the economy...especially the stock market....hasn't taken a major nosedive as a result of this Virus. There's been some short pullbacks in the past year, but the recovery seems to quickly follow.

If this current spike in those getting ill causes another round of lockdowns, etc., we could easily see even more volatility in coming weeks, or months.

Maybe yes, maybe no. The government is hoping to get about $7 trillion in bills passed through Congress. That’s a huge amount of money to shove into the economy. Each time congress approved a spending bill, the market performed positively.

 

[Don M.]

Maybe yes, maybe no. The government is hoping to get about $7 trillion in bills passed through Congress. That’s a huge amount of money to shove into the economy. Each time congress approved a spending bill, the market performed positively.

That's true, but what bothers me is all this government spending without taking measures to fund it. The treasury dept. can only keep printing money for so long...before it become worth little more than the paper its written on. I wonder just how high the national debt can climb before the whole house of cards collapses.

 

[oldman]

That's true, but what bothers me is all this government spending without taking measures to fund it. The treasury dept. can only keep printing money for so long...before it become worth little more than the paper its written on. I wonder just how high the national debt can climb before the whose house of cards collapses.

That’s the $64,000,000 question. There really is no top to our national debt. As long as the government can sell their treasuries, they will continue to print money. It’s when no one buys the treasury bills
that we will hit a fiscal crisis. After that, it’s anyone’s guess where we will go from there.

Most people believe that China owns most of our debt, but it’s really Americans that own it. Buying notes, bills or bonds, we have many choices on how to invest in America or as the commercial used to say, “Invest in America’s future.” Some future.

Check out the national debt clock. https://www.usdebtclock.org/

 

[Cameron]

Post (i guess this stage of the pandemic) seeing lots of spikes in gdp. Will see how much inflation and or stagflation this all leads to.

we live in interesting times

 

[Irwin]

We're paying over $400 billion a year on interest on the debt. If we invested that money in our country, it could be funding high speed rail, the homeless problem could be solved, we could fix our infrastructure...

 

[Cameron]

Its incredible I find the mess we find ourselves in . Any of the OECD countries, china and russia to a lesser extend have used central banks to create an enormous debt overhang that will likely never get paid off. They would love to inflate it away but just a small rise in the interest rate would shatter most gov't finances and many individuals.

 

[Nosy Bee-54]

We're paying over $400 billion a year on interest on the debt. If we invested that money in our country, it could be funding high speed rail, the homeless problem could be solved, we could fix our infrastructure...

There will be no high speed rail. Americans love their cars. Plus the airline lobby will never support it.

 

[Don M.]

Check out the national debt clock. https://www.usdebtclock.org/

Yes, that's a site that everyone should take a look at. The numbers are spinning so rapidly upwards that the eyes can hardly keep up. The main reason why bank interest rates are so low is this ballooning national debt...if the Fed allowed interest rates to rise to what they were just a few years ago, the entire federal budget would be going to Interest on the debt.

The US ran up a similar debt in WWII, but in the late 40's tax rates went as high as 90%, and by the early '50's, that debt was resolved. Try that today...I guess the people back then cared more about the nation than today's people.

Nations are no different than individuals....when a person runs up massive debt that they can no longer sustain, they have little choice but to declare bankruptcy. Nations face the same prospect, eventually...witness what happened to Greece and Argentina a few years ago....and it was the bulk of their general populations who took the hit when prices doubled and tripled.

 

[ProTruckDriver]

Check out the national debt clock. https://www.usdebtclock.org/

Going through some of my old files, I took this screen shot on the Debt Clock on January 30, 2010. Look at it now. As the old saying goes, "Houston, We Have A Problem".

 

[Don M.]

The Fed Funds rate is currently hovering around .25%...so as to allow our government to continue spending wildly without falling into bankruptcy. Individual savings in the banks are lucky to be earning .5%....and there is even talk about going to "negative interest" rates, which would penalize anyone who has any savings.

The Fed Funds rates went ballistic around 1980..with rates of almost 20%. Were something like that to happen today, with this massive national debt, our government would Collapse.

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

 

[oldman]

The Fed Funds rate is currently hovering around .25%...so as to allow our government to continue spending wildly without falling into bankruptcy. Individual savings in the banks are lucky to be earning .5%....and there is even talk about going to "negative interest" rates, which would penalize anyone who has any savings.

The Fed Funds rates went ballistic around 1980..with rates of almost 20%. Were something like that to happen today, with this massive national debt, our government would Collapse.

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

It really doesn’t matter, Don. We have no way to ever pay off or pay down this debt. What the government takes in with taxes barely pays the interest. I can’t tell you when we paid anything against the principal.

Congress is again going to borrow more money for the upcoming spending bills. All totaled it will be about $7 trillion. That puts us about $35 trillion in debt. What are these people thinking? At least the dollar is showing some strength for the time being. Even that makes me wonder.

 

[Tom 86]

The Fed Funds rate is currently hovering around .25%...so as to allow our government to continue spending wildly without falling into bankruptcy. Individual savings in the banks are lucky to be earning .5%....and there is even talk about going to "negative interest" rates, which would penalize anyone who has any savings.

The Fed Funds rates went ballistic around 1980..with rates of almost 20%. Were something like that to happen today, with this massive national debt, our government would Collapse.

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

My savings account is showing. .002¢ I never know we had anything below 1¢ ??

 

[Been There]

I remember under Reagan, the economy soared over 7%. Americans hailed this as a relief from the prior administration and the severe recession that the country had fallen into. The economy grew at a rate of 7.2%. Although Reaganomics worked back then, today it probably would not be acceptable due to our even lower tax rates.
https://www.thebalance.com/president-ronald-reagan-s-economic-policies-3305568