Daily Revolt

April 28, 2007

Economy at Its Slowest in 4 Years

I wonder how much the quagmires in Iraq and Afghanistan have contributed to the stagnant economy. At the heart of the problem is higher interests rates. Which have been the result of higher oil prices. Which was the result of the war:
Economic growth slowed to its weakest pace in four years during the first three months of 2007, underscoring how the persistent slump in the housing market continued to serve as a drag on the American economy.

The slower economy will drive up the budget deficit which means less resources to pay for anything:
The abrupt slowdown was not enough to put a brake on inflation, however. The consumer price index most carefully monitored by the Federal Reserve, which excludes food and energy, rose 2.2 percent in the quarter, at an annual rate, above the Fed’s stated comfort ceiling.

“It’s sort of more inflation, less growth,” said Stuart Hoffman, chief economist of PNC Financial. “That’s not a tasty combination.”


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