The recovery is based upon government spending, which won't last, killing the recovery
Froomkin 2010
Dan, Huffington Post Online, http://www.huffingtonpost.com/2010/01/23/7-things-about-the-econom_n_433688.html
Even assuming that we are at the beginning of an enduring recovery, there are many signs that it will be a slow one, and that it could be as long as a decade until most American families return to the standard of living they enjoyed before the crash. Most notably, unemployment is widely expected to be astronomically high for at least another year or two -- remaining around 10 percent through 2010. the recovery, such as it is, has been largely fueled by government money -- not just the stimulus, but also the bailouts, targeted programs such as the homebuyers tax credit and "cash for clunkers," and emergency spending on such things as extended unemployment insurance. What happens, however, when those stop? And none are designed to go on forever. Washington Post financial columnist Steven Pearlstein recently put it this way:
UQ – Economic Recovery is an Illusion
When the stimulus ends and inventories are corrected, recovery will regress
Froomkin 2010
Dan, Huffington Post Online, http://www.huffingtonpost.com/2010/01/23/7-things-about-the-econom_n_433688.html
My best guess is that the current upswings in economic output, confidence and financial asset prices are largely a reflection of the extraordinary fiscal and monetary juice provided by Treasury and the Federal Reserve, along with the natural rebound that occurs after a collapse in consumer and business spending like that which occurred in the first half of 2009. The surprising strength of the bounce-back testifies to the wisdom of the underlying strengths of the U.S. economy and the success of the policies, but is likely to peter out as the stimulus begins to wear off and the inventory correction is completed.
No solid foundation for economic recovery
Froomkin 2010
Dan, Huffington Post Online, http://www.huffingtonpost.com/2010/01/23/7-things-about-the-econom_n_433688.html
The giddiness over the recovering stock market makes it easy to overlook some key questions about its rise. But what exactly has sent the Dow up almost 70 percent since March? Could it be another bubble? And could it burst?Was it a function of the extraordinary liquidity pumped into the system, first through the bailouts and now through nearly zero-interest loans to the banks? Was it foreign investors attracted by weak dollar and low interest rates? Where's all the money coming from? No one seems to know. (Does anyone really care?) But whatever it was could presumably come to an end, devestating the market and the economy.
UQ – Economic Recovery Now
The economy is high now – the auto industry is making record profits
Voice of America 7/30
(Dan Robinson, 7/30/10, http://www1.voanews.com/english/news/Obama-Tours-Auto-Plants-to-Spotlight-Industry-Recovery-99654889.html)BHB
President Barack Obama visited two automobile manufacturing plants near Detroit, Michigan, to spotlight progress made in helping the U.S. auto industry recover from near collapse. From the brink of collapse, when President Obama took office and forced the government to step in to support General Motors and Chrysler, the auto industry has made steady progress. The administration points to statistics showing that after huge job losses linked to the U.S. financial crisis, auto industry job growth is on track to be the strongest in more than a decade, adding 55,000 jobs since the middle of 2009. The president was welcomed to the Chrysler Jefferson North Assembly Plant, where the car company employs just over 2,800 workers.
The economy is high know the housing market has returned
Rosnick 7/30
(David Rosnick – Center for Economic and Policy Research, 7/30/10, http://yubanet.com/usa/GDP-Rises-2-4-Percent-in-Q2.php)BHB
Gross Domestic Product grew at a 2.4 percent annualized rate in the second quarter of 2010. Final demand from domestic sources contributed 4.12 percentage points to GDP - the largest quarterly contribution to growth since 2003. The largest contributor to final domestic demand came in fixed investment, which grew at a 19.1 percent annualized rate since the first quarter. Outside of nonresidential structures, the growth in investment was broadly-based. Equipment and software grew at a 21.9 percent annualized rate - the third straight quarter of double-digit growth in that category of investment - adding 1.36 percentage points to GDP growth. Residential investment contributed a little more than one quarter of the growth in fixed investment. This increase is likely driven by a surge in home sales as households raced to claim expiring tax credits. The fees on sales of existing homes are included in this spending category, so the 27.9 percent annualized growth in residential investment is surely masking much weaker construction activity. This is not the first time since the collapse of the housing bubble that home construction has contributed to GDP growth. In the advance estimates of GDP for the third quarter of 2009, residential investment was reported as growing 23.4 percent - only to be revised down to a more modest 10.6 percent and resuming its fall over the next two quarters. It would be surprising if such growth could be sustained for long, given the recent deflation in the price of housing.
UQ – Economic Recovery Now
Employment and productivity are increasing now, jump-starting the recovery
Kileson 10
(Kevin; Econ Researcher Fed Reserve St Louis; April 10; http://www.stlouisfed.org/publications/re/articles/?id=1943&pv=1&utm_source=Research%2Bemail&utm_medium=email&utm_campaign=Research%2BRE%20email) BHB
Economists have been closely watching the contours of this recovery to see if the pattern of job growth—or lack, thereof—is similar to those that followed the previous two recessions. Recall that labor markets did not improve until well after these recessions ended. For example, the 2001 recession was deemed to have ended in November 2001, but the unemployment rate did not peak until June 2003 and payroll employment did not reach its trough until August 2003. Although the current recovery is in its early stages, it nonetheless appears that a similar labor market pattern is developing. Despite rising real GDP in the third and fourth quarters of 2009, firms continued to shed jobs over the second half of 2009 and the first two months of 2010. Although the SPF expects job gains to average about 100,000 per month over the last nine months of 2010, these increases might be much less if not for the hiring associated with the 2010 decennial census. While perhaps disconcerting to the public and economic policymakers, the lack of job growth in the face of rising real incomes and faster economic growth reflects continued strong gains in labor productivity. In 2009, productivity rose 5.8 percent—the largest annual increase since 1965. To most economists, strong productivity bodes well for the economy over the long run. Indeed, rising living standards depend on little else. In the short run, particularly in the early stages of the recovery, firms use their existing labor force and capital stock to fulfill orders and expand production. Eventually, though, the extremely rapid rate of productivity growth increases the growth of income and consumer spending. As the economy strengthens, firms once again begin to hire, forcing the unemployment rate down to its natural rate.
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