Remember the startling news last month that the GDP had actually declined in the fourth quarter of 2012? It became grist for many a conservative argument that we were headed for a new recession unless Republicans got their way and the federal government cut the domestic spending that might provide employment and income, but more crucially discouraged those who created “real jobs” (you know, those with low wages and none of those socialistic pensions or health care benefits).
The report that created all that talk was actually an “advance estimate” of 4Q GDP by the Department of Commerce’s Bureau of Economic Analysis. A second, revised estimate released today shows the economy growing in the quarter, albeit by a slight 0.1% (as compared to the 0.1% decline earlier projected).
What hasn’t changed is that the flagging growth rates near the end of last year were attributable not to private-sector “uncertainty” over the so-called “fiscal cliff,” as was so often asserted, but to the very reductions in public-sector spending Republicans are promoting as the cure for all economic diseases. This is from the Wall Street Journal‘s report on the new GDP estimates:
In the GDP report, federal spending was revised up slightly, but state and local cuts were deeper. Spending at all levels of government fell 6.9% in the fourth quarter.
We ain’t seen nothing yet.