State and local budget cuts dragged down US economy last quarter

Just as it did in the UK. Wait until the full impact of the budget chopping at the local, state and national level kicks in. The GOP is poised to crush any hope of recovery. The Social Security tax cut may have some impact but to expect anything like that to make up for stimulus money is unrealistic.

The Commerce Department reported Friday that economic growth increased at an annual rate of 2.8 percent in the final quarter of last year. That was down from the initial estimate of 3.2 percent.

State and local governments, wrestling with budget shortfalls, cut spending at a 2.4 percent pace. That was much deeper than the 0.9 percent annualized cut first estimated and was the most since the start of 2010.

Consumers spent a little less than first thought. Their spending rose at a rate of 4.1 percent, slightly smaller than the initial estimate of 4.4 percent. Still, it was the best showing since 2006. And it suggests Americans will play a larger role this year in helping the economy grow, especially with more money from a Social Security tax cut.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

Share This Post

© 2019 AMERICAblog Media, LLC. All rights reserved. · Entries RSS