GOVERNMENT NOW REVISED ITS FORECAST FOR THE ECONOMY-DOWNWARD AGAIN, BUT IS IT FAR ENOUGH? ARE THEIR FORECASTS RELIABLE, OR JUST CRYSTAL BALL?

The crystal ball came out again with the government "futurists" and crystal ball readers forecasting and predicting more gloom for the economy. I would be willing to pay actual money to see the raw data that they use to predict future events like "...and then in the fourth month after the Thanksgiving holiday...the economy will mysteriously turn up...maybe."

I wonder is these predictions come to these futurists in their dreams, sort of like that Tom Cruise movie where these people can see future events in their dreams and thoughts.

I too want to be a futurist, but my notes are based on common sense, not dreams.

Predicting economic future events is really not that difficult if one just looks around and pays attention to what is happening and likely to happen based on government policies as planned for the country.

Here is my short list of notes to then be used to predict future events:

1. TAXES WILL INCREASE ON JOB PROVIDERS PERSONALLY.
2. TAXES ON EVERY INDUSTRY AND BUSINESS THAT EMITS CO2 WILL IMPACT EVERYONE, SINCE WE ALSO EXHALE CO2, as does every animal we grow for food.
3. PROVIDERS OF EVERY UTILITY WILL PAY MORE UNDER THE NUTTY CAP AND TRADE TAX, AND THUS PASS THAT TO EVERY CONSUMER.
4. GOVERNMENT MANDATES OF EVERY TYPE will increase taxes, pass-thru fees and charges.
5. THE DOLLAR WILL BE WORTH LESS AND LESS, THUS ALL GOODS WILL COST MORE AND MORE ESPECIALLY IMPORTS FROM CHINA AND OIL IMPORTS FROM OTHER COUNTRIES.
6. AS INDUSTRIAL COMPANIES DO WORSE, THEIR WEAK PERFORMANCE WILL IMPACT THE STOCK MARKET AGAIN, AS VALUES DECLINE.
7. HIRING NEW WORKERS WILL BE TOTALLY STIFLED WITH THE CARD CHECK BILL, SINCE EVERY EMPLOYER WILL BE SUBJECT TO BECOMING UNIONIZED AND THUS WILL NOT HIRE MORE PEOPLE.
8. MANDATORY HEALTH CARE TO COVER PEOPLE THAT DO NOT WANT COVERAGE WILL ADD A SIGNIFICANT BURDEN FOR EMPLOYERS, WHO WILL NOT HIRE MORE PEOPLE.
9. BANK LENDING IS RESTRICTED TO BETTER CREDIT WORTHY CUSTOMERS, CUTTING OFF OR DIMINISHING CREDIT TO 95% OF BUSINESSES (no credit, no expansion).
10. NEW CREDIT CARD RESTRICTIONS WILL CAUSE LESS CREDIT TO BE AVAILABLE AND WILL LIMIT SMALL BUSINESS GROWTH.
11. LACK OF A VARIETY OF FINANCING FOR HOME PURCHASES AND BUILDING WILL KEEP THAT INDUSTRY WEAK.
12. FORCING CAR MAKERS TO MAKE CARS NOBODY WANTS (small, stupid looking and unsafe), WILL NOT REVIVE THE AUTO INDUSTRY.
13. RETAIL SALES ARE FALLING DUE TO LACK OF CREDIT BY CONSUMERS WHOSE CREDIT LINES ARE TAPPED OUT FOR THINGS LIKE FOOD PURCHASES ON THEIR CREDIT CARDS.
14. INDIVIDUAL STATES ARE RAISING TAXES ON THEIR RESIDENTS IN EVERY CONCEIVABLE CATEGORY, AND ADDING LOTTERY GAMES AND CASINOS, TO FURTHER EMPY OUT THE POCKEST OF THEIR RESIDENTS.

ETC.,ETC., ETC.,ETC............

So, I then take these short notes and overlay them into the future few months and years to predict the future.

So, based on these notes I predict that by the end of the year the entire economy will just wake up with a jolt, and start a fantastic growth spurt...NOT!!!!!

How can the government make a prediction of economic growth when they obviously have some note cards similar to mine?

There is only one explanation....mind control from Washington..."you will see a recovery...this is good news...it will improve...now repeat again...this is good it is improving..."

There may be green shoots appearing for the economy, but to much of the Federal Reserve they appeared to be light green. Central bank officials in recent months grew more pessimistic about their prospects for the economy, expecting a worse 2009 and 2010 than they forecast in January.

The projections, provided for the April 28-29 Federal Open Market Committee meeting, show central bankers getting closer to private economists’ expectations for the unemployment rate. The central tendency of the forecasts (excluding the three highest and three lowest among 17 policymakers) puts the unemployment rate at between 9.2% and 9.6% in the fourth quarter, down from the earlier projection of 8.5% to 8.8% made in January. The fourth-quarter 2010 forecast worsened to 9% to 9.5%, compared with a projection of 8% to 8.3% submitted in January. Even the 2011 forecast went up a full percentage point to between 7.7% and 8.5% in the fourth quarter of that year.

Fed officials still expect a recovery in sales and production to begin in the second half of this year, but the forces weighing on the economy were “likely to abate only slowly,” a summary released with the minutes said. Gross domestic product was projected to decline by 1.3% to 2% in the fourth quarter of 2009 from the year-earlier period, worse than the January projection of a decline between 0.5% and 1.3%. The forecast for 2010 was also downgraded a bit: the central tendency projection is now 2% to 3% growth, down from the January forecast of 2.5% to 3.3% for 2010.

The Fed said officials expected that “recoveries in consumer spending and residential investment initially would be damped by further deterioration in labor markets, still-tight credit conditions, and a continuing, if less pronounced, decline in house prices. Moreover, they anticipated that very low capacity utilization, sluggish growth in sales, and the high cost and limited availability of financing would contribute to further weakness in business fixed investment this year.”

Projections for growth in 2011, while downgraded, remained strong with output between 3.5% and 4.8% in the fourth quarter compared with a year earlier. But the Fed said most officials believe the economy would take five or six years to return to what they consider sustainable paths for growth, unemployment and inflation.

UPDATE: The Fed’s minutes, however, also noted that the Fed staff “revised up its outlook for economic activity in response to recent favorable financial developments as well as better-than-expected readings on final sales.” As is the Fed custom, the minutes didn’t include the specific numbers. “The staff’s projections for economic activity in the second half of 2009 and in 2010 were revised up, with real GDP expected to edge higher in the second half and then increase moderately next year.” The staff economists cited “the boost to spending from fiscal stimulus, the bottoming out of the housing market, a turn in the inventory cycle from liquidation to modest accumulation, and ongoing gradual recovery of financial markets.”

But the staff forecast shows the unemployment rate rising rise through the beginning of 2010 before edging down over the rest of that year while overall. Estimates for inflation over the next two years, measured by the personal consumption expenditures (PCE) inflation, the Fed’s favorite gauge, were revised up “slightly.”

Looking to 2011, the staff anticipated that financial markets and institutions would continue to recuperate, monetary policy would remain stimulative, fiscal stimulus would be fading, and inflation expectations would be relatively well anchored, the minutes said. Under those conditions, the staff projected that real GDP would expand fast enough to bring the unemployment rate down significantly.

What? How will that happen if personal consumption is being criticized by the President himself. His speech at Notre Dame's commencement chastised conspicuous consumption, and his criticism of traveler's going to Las Vegas is responsible for a significant slow-down in tourism visits to that town.

Furthermore, government moves at all levels are forcing less consumer spending, and instead have increased FEDERAL spending to unsustainable levels.

How again is all this going to result in a surge and growth in our economy?