January 28, 2011

GDP report shows U.S. is at a 'tipping point'

To put the report in perspective, average(inflation-adjusted) growth for our economy over the past 50 years has been 3.3 percent, and we’re defining down if we get excited about 3.2 percent growth,” said Davies. “These reports are only snapshots, and since the economy is a growing, dynamic entity, we need to look at the trend from a series of these snapshots. When we do that, we see spikes up and down, but a clear trend in the positive direction.

Unfortunately, however, we’re approaching a tipping point. If the federal government doesn’t get its act together, and the last budget indicates we are far from doing so, we could be looking at the end of the U.S. playing a role as the leading economic super power,” he said. “This would come at the point when Medicare is projected to reach insolvency, which could be as soon as in the next 10 years.

President Obama was irresponsible in his SOTU address, because our greatest threats are debt and the unfunded Medicare and Social Security obligations,” said Davies. “This should have been his number one priority, and he shouldn’t have talked about anything else except a clear plan of how to deal with these financial problems in the next 5 to 15 years.