Isn't the US's growth rate typically 2.5-3%? If so, that would mean that the US's economy has basically just dropped two years of growth in three months.

Unless, of course, the article is referring to a 6.1% decrease from Q1 last year, and not from Q4.

This is the real scary part.

The reason, is our government over the last 20-30 years has spent more money than it has collected. While the deficit has grown, our GDP has grown along with it to help reduce the impact of our losses (or at least mask them).

We can no longer rely on that growth, but not only are we not spending less to compensate for it, the Senate just past an insanely expensive 2010 budget.

One day… soon… this is all going to come crashing down, and it’s going to make the little recession we are in look like child’s play.

Apparently, we as a country don’t know how to stop spending until we start starving to death.

So, by your logic, a government should not cut taxes during a recession because it will cause them to run a deficit.

This thread needs some humor.

Is that really a bad thing?

There seems to be this assumption that having a big ca deficit will lead to a sudden crash in an economy. It won't. In fact, a country can continue to have economic growth even with this deficit.

The problem comes with relative growth. The amount of growth that the US/UK/other EU countries will have will be slower than countries who have a ca surplus. Thus we will be relatively poorer. It doesn't mean that standards of living will decrease, just not increase as rapidly as other countries.

When you borrow money, you sign a contract, and you give the money back gradually, over a long period of time, with interest. The people your borrowing the money from doesn't suddenly ask for all the money in one hit. It's like getting a mortgage and then the bank suddenly demanding it all back.

The people you're borrowing the money from don't want it all back straight away because they know that they'll make more money in the long through the interest. The people borrowing the money don't pay it back straight away because they're happy with the short-term benefits of the money.

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A good example of this would be trying to build an extension onto your house.

- The extension will cost you £15,000.
- You can afford to save £300 per month.
- This will mean that it will take you ~4 years to save up for the extension.
- A bank approaches you offering to lend you £15,000 now, and you only have to pay £150 a month for the next 10 years.
- Great! Instead of having to wait for 4 years to get your extension, you can have it done now. What's more, you'll only have to cut £150 off of your monthly spending.

However, this means that you have to pay an extra £3,000 over the years. You've sacrificed £3,000 which you could have spent on an extra holiday in the long term, for a short term benefit.

Your standard of living hasn't dropped, it's stayed the same. However, your neighbour also did the same thing, except he saved the money himself. Sure, he didn't get his conservatory for 4 years, but when he did get it, he had caught up with you, and then he was also able to pay for that holiday, meaning that his standard of living has surpassed yours.

Which is how I "roll." which kinda makes me annoyed by the government.

Yeah, sure, it's not great, but the world won't come crashing down around us, like some posters/politicians/etc try to make out.

Unfortuneatly, we have a problem with the fact that politicians can't see ahead of the next election, so, short term. How about removing democracy? That would solve the issue.

I kid, of course... *ninja-eyes*

It's really why i think democracy needs some "grown up" laws.  That stop the focus on the right now.

Like the previously suggested in America "Balanced Budget Ammendment" which would force the government to keep a balanced budget unless a state of emergency is declared or war.

From an economic growth standpoint...yes.  It is much easier to grow your GDP if you have a larger workforce and more people spending money in your country.  You are actually hurting your country's economic growth with harsh immigration policies (assuming obviously that you aren't already supersaturated like China).

This is another reason I find the Republican Party's stance on immigration kind of confusing.  It is anti-business.