Considering 1 in every 5.5 dollars of income for the average American is now a direct infusion from the government, are we surprised the malls are bustling? [May 25, 2010: 1 in 5.5 Dollars of Income Now via Government]. Essentially for every $80 Joe 6Pack earns, the government finds another $20 to hand him.... a most blessed situation. We don't need no stinkin' jobs - we have D.C..... now inject me in my buttocks with some of the cash, I need to go to the mall! [Nov 5, 2010: USA Today - Anti-Poverty Programs Now Surpass Cost of Medicare] [May 5, 2009: Federal Aid Surpasses Sales Taxes as Top Revenue Generator for States]
- Pacific Investment Management Co., which manages the world’s biggest bond fund, is raising its forecast for U.S. growth next year as policy makers pump a “massive amount” of stimulus into the economy.....
- Pimco sees the economy growing 3 percent to 3.5 percent in the fourth quarter of next year from the same period of this year. That compares with its previous estimate for 2 percent to 2.5 percent growth.
- "We revised this week our outlook for U.S. growth in 2011 taking into account Monday's announcement on additional fiscal stimulus measures," El-Erian said.
- “The U.S. is using fiscal and monetary policy to try to attain escape velocity for the economy,” El-Erian said. “What we don’t know yet is whether that will be enough not just to change the economy’s trajectory for one year but to place it on a medium-term sustainable path.”
- U.S. policy makers are reacting to the new normal by pursuing “increasingly unconventional” strategies to aid the economy, El-Erian said.
- “The new normal is still here,” El-Erian, 52, said. “What the policy makers are doing is kicking the can down the road in response to the symptoms of the new normal, but they’re not yet changing the medium-term dynamics.”
- Europe, too, is struggling with the fallout from the new normal as the region has been hit with a sovereign-debt crisis. Pimco expects the euro area’s economy to grow by 0.5 percent to 0.75 percent next year, El-Erian said. “Europe is on a completely different track than the U.S.,” El-Erian said. “It is trying to achieve sustainable growth by getting its economic house in order through fiscal austerity.”
- The European Central Bank has stepped up buying bonds from the region’s most-indebted countries to prevent the market rout from spreading. The ECB is “basically providing liquidity support for a solvency issue,” El-Erian said. “The question is whether the market will cooperate with that,” he added. “If it doesn’t, you will get disorderly restructurings in some peripheral countries and even more economic contraction.”
- In the U.S., policy makers need to follow their stimulus- induced boost to growth with steps to bring down the budget deficit in the medium term and improve long-term competitiveness, he said. "It's important to ask whether the extraordinary fiscal and monetary stimulus measures, by themselves, will also have a meaningful impact on growth beyond 2011." (not really... all we need to do is create the next $500 billion per annum stimulus plan when the time comes... along with the effective 0% Fed funds rate to infinity and beyond. 10 to 12% deficits forever will continue to fund the 'recovery'.... remember America does not do cost benefit analysis. No one remembers what costs are necessary to derive growth anymore. We just celebrate the 'miracle' of our growth and clap like seals at the 'better than expected' data while not looking our grandchildren in the eyes at what we pour onto them - no costs here. Only positives - buy stocks.)