For the first time in years we’re seeing a slight contraction in economic growth. Here is an email alert from the New York Times from this morning:
The United States economy contracted unexpectedly in the final quarter of 2012, hurt by weaker exports, a drop in military spending and a slower buildup in inventories.
The Commerce Department said Wednesday that economic output in the quarter fell at an annual rate of 0.1 percent, compared with growth at a 3.1 percent pace in the third quarter.
But that won’t stop Republicans from playing the Blame Obama game. Did I mention that, per a Fox Business email alert, the ADP National Employment Report shows the U.S. private sector added 192,000 jobs in January, topping estimates of 165,000?
I realize the right doesn’t want to hear or believe this, but when Washington spends far less — in this case, the cuts focused on defense — it takes capital out of the economy and undermines growth. It is, as a practical matter, a form of austerity, which hits the brakes on the economy. This is Economics 101 and yet Republicans continue to insist that it is the only policy they really care about.