Editorial

Published:

No one is necessarily going to jump up and down about U.S. economic growth in the 2.7 percent range. But they might at least smile when it's compared to the 2 percent that had been forecast for the third quarter of 2012. However, even that more optimistic number doesn't look so good upon further review.

Some economists attributed the higher number to business inventory adjustment, which means it will be difficult to duplicate in the final quarter of 2012.

With inventories taken out of the figure, reports Reuters, the GDP growth figure is 1.9 percent. In addition, consumer spending in the third quarter was 1.4 percent, the smallest increase in a year.

On the other hand, home prices increased during the first nine months of this year. According to The Wall Street Journal, this represents the biggest increase since 2005.

From these figures emerges a rather erratic snapshot of the economy. What seems discernible is that the good news is spotty which suggests that the economy is very much a work in progress.

Add to that many unanswered questions concerning federal fiscal policy in 2013. A lot of those concern the so-called "fiscal cliff," which comes to fruition in January if Congress does not find a solution to avert a series of automatic tax increases and spending cuts. Economists warn that these, if enacted, may prompt another recession.

Unfortunately, these things suggest that the best we can hope for right now is an economy that holds its own.

Not too serious

Speaking of the fiscal cliff, Congress and the White House haven't done much to avert it.

The latest Obama administration proposal is to insist upon raising taxes for America's wealthier citizens in the hope of raising $1.6 trillion in new revenue over 10 years.

In return, the administration has offered a sketchy plan to cut some $400 billion in entitlement spending, though it wants to spend money for certain emergency benefits and economic stimulus programs.

Everyone wants to avoid the fiscal cliff with its tax increases and automatic cuts, but something serious still needs to be done. The White House plan doesn't reflect that.

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