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Thursday, December 22, 2011

Signs of Growth Misleading, Forecasters Say


“As the fourth quarter draws to a close, a spate of unexpectedly good economic data suggests that it will have some of the fastest and strongest economic growth since the recovery started in 2009, causing a surge in the stock market and cheering economists, investors and policy makers…. But the good news also comes with a significant caveat. Many forecasters say the recent uptick probably does not represent the long-awaited start to a strong, sustainable recovery. Much of the current strength is caused by temporary factors. And economists expect growth to slow in the first half of 2012 to an annual pace of about 1.5 to 2 percent.” (New York Times)

Government gimmicks can produce the illusion of growth short term, but never the real thing.

FEE Timely Classic
“Economic Freedom and Economic Growth” by Randall G. Holcombe