David Stockman: Terrific Interview

The GDP formulat is Y = C + I + E + G
Y = GDP
C = Consumer Spending
I = Private Sector Investment
E = Exports Less Imports
G = Government Spending

There are of course a bunch of sub-accounts that build up to those variables.

So I agree that a reduction in government spending will impact overall economic growth if the other components of GDP stay flat or decline as well. There are other levers in there that offset the decline in G or the reduction in healthcare spending that would impact C.
 
So it is impossible over the next few months to declare a recession.

The semi-offical definition of recession is two or more quarters of decline in economic activity, i.e. negative real (inflation adjusted) GDP growth.

As of this morning we revised the previous quarters GDP growth figure to 2% and announced a 1.5% growth performance for the latest quarter. There will be no recession announcement for another six months at a minimum.

Since it is unlikely we will see any change in the government spending you highlighted and the Fed still has the foot on the gas of monetary stimulus, it is really unlikely that we will see a recession six months from now either.

Ex a macro shock like Europe blowing to smithereens, the probability of several quarters of negative GDP growth seems really low.

The Economy is certainly stuck in the mud and not growing but it is not teetering either.
 
I'll defer to your explanation here. July falls into the 3rd quarter and many corporations are reporting drops in revenue. Agai, we'll have to wait.
 
I'm not sure what questions you want answered that haven't been discussed. But whatever they are, they can wait. I'm still waiting for a response here.
 
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