Much was made of the 3.5% annualized GDP growth that was reported this week. The Bush-Blamer-In-Chief stated that the figures were “an affirmation that this recession is abating and showed the steps we’ve taken have made a difference”. Really? Have they made a “difference”? Have they accomplished anything that will last beyond the massive amount of American taxpayer money that has been thrown at the problem? Let’s look at the numbers.
Of the 3.5% gain, over 2% of the gain was due to durable goods - and most of that was automobile sales, buoyed primarily by the now-ended “Cash for Clunkers” program. Without this gain, the GDP would have increased at a much lower rate of around 1.9%. What about future auto sales? In September, sales plummeted as the C4C program sucked away sales that would have occurred later. Also, Edmunds.com reported that the overwhelming majority of these car sales would have occurred anyway, so the actual cost of the 125,000 additional vehicles that can be credited to C4C was closer to $24,000 per vehicle, rather than the $4000 average rebate. Of course the Obama administration didn’t appreciate Edmunds calling their baby ugly, so they became an official member of the White House Enemies List.
