Economic Growth

Robert Benchley probably had the last word in this department when he declared that there are, in fact, two kinds of people in the world: Those who think there are two kinds of people - and those who don't. But a succession of experiences have led me to believe that in present-day America the principal dividing line among people is between those who think the top priority for America should be the challenges of the global economy, and those who think our top priority should be solving the problems of race.

The year 2000 computer bug should not slow U.S. economic growth even as much as a speed bump, according to the most authoritative government study yet. Still, the study by the Commerce Department yesterday pinned a staggering $100 billion price tag on the nation's repair bills for the Y2K problem, or $365 for each man, woman and child. The study concedes that: "The truth is, no one knows with certainty what the precise economic consequences will be. " However, it then adds in italicized script: "It is our best judgment that Y2K problems will not be of sufficient size or scope to have more than a transient effect on U.S. economic growth.

Spend, spend, spend. Here in the world's consumer paradise, that's one of the things we do best - and it's a habit that could land us in hot water, if it hasn't already. With our gluttony for everything from camcorders to four-wheel-drive vehicles, Americans are the black sheep of the industrialized world when it comes to saving money. For the nation, this failure to save carries a high price. That's because household savings helps to fuel the economy. It's not just money stashed in bank accounts, but also purchases of stocks and bonds and mutual funds.

Dramatic changes in the worldwide economic structure raise serious concerns, and much of the public debate and many decision-makers, as the old saying goes, can't seem to see the forest for the trees. The debate is too tightly focused on partisan rhetoric and how current global competition pits nations with differing cost structures, regulatory systems, and financing schemes against each other. We need hard work focused on achievable strategies if we are to thrive under the new realities.

Stocks drifted through most of yesterday's trading despite a retail-sales report that indicated moderating economic growth. However, the Standard & Poor's 500-stock index set a closing record, finishing at 482.55.

If you had told investors what was going to happen in 2012 - U.S. economic growth at stall speed, an intensifying European debt crisis, a slowdown in China, fiscal deadlock in Washington, decelerating corporate-earnings growth - and asked how the stock market would perform, few would have predicted a good year. But that's just what they got. The markets all ended the year substantially higher, despite losing ground in the final days as fiscal-cliff concerns mounted. The Dow ended 2012 with a 7.3 percent increase, its fourth yearly gain in a row, having started the year at 12,217.

The National Bureau of Economic Research. . . made it official Monday: The United States ended its record 10 years of economic growth in March and the nation has since been in a recession.Remember, though, the news Monday largely was not a prediction of the future, it was an analysis of the past. It is too soon to know for certain if a recovery is already under way. - Editorial, Chicago Tribune, Nov. 27

WASHINGTON - Americans shrugged off higher taxes to lift the economy at the start of the year. Government spending fell, though, and the impact of the tax increases along with federal budget cuts could slow growth later this year. Economic growth sped to a 2.5 percent annual rate in the January-March quarter, the Commerce Department said Friday. That was up from a pokey 0.4 percent annual growth rate in the October-December quarter. Consumer spending surged at an annual rate of 3.2 percent - its biggest jump since the end of 2010.

Economic growth is not an issue normally associated with the Pentagon. But on Jan. 23, 2006, officials there handed the Defense Department's Distinguished Public Service Award to then-outgoing Federal Reserve Chairman Alan Greenspan. The reason for the award: He helped unleash tremendous economic growth that had strengthened the country, led to new advances in science and technology, and demonstrated the power of a free and open economic system. The importance of economic prosperity is hard to overstate.

The meaning of yesterday's Boskin Commission report on inflation is that it challenges the common belief that real wages have been declining and that economic growth has been stagnant, according to economist Leonard Nakamura of the Philadelphia Federal Reserve Bank. "When people eventually look back on this period, they will think we suffered from a kind of mass delusion" brought on by misleading statistics, says Nakamura, an expert in inflation measurement. "People ought to feel better than they do. " The Boskin Commission found that the Consumer Price Index will overstate annual inflation by 1.1 percentage points for the next decade and recommended that the Bureau of Labor Statistics create a more accurate cost-of-living index on which to base government benefits increases.