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Showing posts with the label GNP

Ramblings on Government Debt-Are we in need of a paradigm shift?

The governmental budget has always been an important part of public discussion. After the 1970’s and 80’s the amount of publically held debt rose from around 35% of GNP to almost 75% of GNP today. According to a new report by the Congressional Budget Office that debt will exceed 100% of GNP in 25 years. Growing debt and lack of sustainable fixes might be one problem related to not having a paradigm shift on institutions and spending.  Government has a responsibility to use money wisely in order to enhance the lives of people and encourage the longevity of fundamental American values. When institutions take on an existence of their own and fail to change, they also neglect meeting their fiduciary responsibilities to the American public. Each wasted dollar is a dollar that can’t be used for the greater good of the nation.  The growing deficit should be a concern for all Americans as our and our children’s livelihoods rest on the ability to ensure government is sustainable an

Are Lower Fuel Prices Acting Like an Economic Stimulant?

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Fuel prices are heading downward to the merry of consumers and corporations alike. At the pump are some of the lowest prices we have experienced in over four years. Low fuel prices are not only helpful for families trying to balance their budgets but also businesses that benefit from lower costs of building, manufacturing, and distributing products. Low fuel prices could potentially have a positive influence on economic growth in many of the same ways as a stimulus. Consumer Disposable Income : Fuel is an expense that families must pay in order to get to work, drive their kids to school events, or go to the grocery store. Families may cut back on traveling in lean years but generally rely on their automobiles for daily errands. When fuel prices decline the amount of money families must spend also declines creating greater disposable income for purchasing other products.  Lower Business Costs: It costs companies to truck products from one location to the other. It also c

Can the U.S. Be an Export Nation in a Difficult International Economy?

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The IMF says the global economy will grow slower than expected this year while another recent announcement states that China superseded the U.S. in terms of purchasing power this year. Both are game changing events in what appears to be a long played out economic drama. Even though the news is not positive it does provide an opportunity for the U.S. to focus on improving its infrastructure to lower costs and retool for better managing international markets.    Slower International Economic Growth: International markets are expected to experience slow growth in the near future according to an October 7th report by the International Monetary Fund (IMF). The IMF initially thought the world economy may grow as high as 3.7% this year but have revised that number down to a weaker 3.3%. The slowing economy could make it more difficult for companies that are trying to export overseas to locations where the economy is lack luster. Growth in advanced economies and emerging eco

Does Improvements in Consumer Sentiment and GNP Indicate Future U.S. Growth?

The University of Michigan recently announced improvements in consumer sentiment from 80 in March to 84.6 in September ( 1 ).   Consumers who have been frugal with their pay checks over the past may now be willing to open their wallets. Increased consumer spending matched with improvements in Gross National Product (GNP) could be a good sign for the economy.  Consumer sentiment and sales are two different things but certainly positive impressions today can lead to increased sales tomorrow.   According to Gelper, et. al. (2007) positive consumer sentiment is followed by increased purchases of products and services in the trailing 4-5 months. They argue that consumer sentiment maintains some predictive power over consumer spending.  Another complementary announcement by the Commerce Department posted a rise in Gross Domestic Product (GDP) to 4.6% ( 2 ).   Positive GNP numbers were realized from personal consumption expenditures, exports, private inventory investment, state a