Tucked in between is fourth-quarter GDP — how fast the U.S. economy grew in the last three months of 2012. And throw in the Federal Reserve's first big meeting of the year. “Brace for a Super Bowl of economic data,” in the words of Joseph LaVorgna …
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The George W. Bush Institute is launching its first book, which features experts weighing in on ways for the U.S. to jumpstart the economy toward 4 percent gross domestic product growth.
The former president writes the foreword for “The 4 Percent Solution: Unleashing the Economic Growth America Needs,” which will be released Tuesday. He is set to give brief remarks at an event Tuesday evening in Dallas featuring several of those who contributed to the book.
James K. Glassman, executive director of the Bush Institute, said that the book — which includes entries by five Nobel Prize winners — is part of “The 4 Percent Growth Project” launched last year with a goal to “change the conversation in America so that it focuses on the goal of sustainable, strong growth.”
“We think that the way to solve the economic problems that America faces can be summed up in 4 percent growth. Right now we’re growing about at 2 percent. We’ve grown an average of about 3 percent since the end of World War II,” said Glassman, who wrote the book’s introduction.
Economic growth is one of the Bush Institute’s focal points, along with education, global health and freedom. The institute and the presidential library will be housed at the George W. Bush Presidential Center, which is under construction on the campus of Southern Methodist University.
There were two recessions during Bush’s eight years in office, the first a mild downturn that began in March 2001, just after he took office, and lasted eight months. The second, which began in December 2007 and ended in June 2009, months after he left office, became known as the Great Recession, the longest and deepest since the Great Depression of the 1930s.
“While the causes of the 2008 crisis will be debated by scholars for decades to come, we can all agree that excessive risk-taking by financial institutions, irresponsible decisions by lenders and borrowers, and market-distorting government policies all played a role,” Bush said in the book’s foreword. “The question now is which policies we should adopt to fix the problems, speed the recovery, and lay the foundation for another long, steady expansion.”
Glassman said ideas in the book for stimulating the economy include broad tax reform that would keep taxes low — extending the Bush-era tax cuts, broadening the tax base by getting rid of special exemptions and loopholes, taxing consumption rather than income and lowering corporate taxes. He said the book also touches on immigration policy and its effect on the economy, advocating for a policy that would help “attract the smartest people from around the world.”
Glassman said that the hope is that the idea of focusing on growth will become part of the conversation this election season.
“Certainly Republicans and Democrats can disagree on how to get growth,” Glassman said. “Some people say, ‘Well, the best way to get growth is through government spending.’ We disagree with that, but that certainly is a position to take. We say cut government spending, reform taxes, change immigration policy and so on.”
Since leaving office, Bush largely has avoided the political scene, instead focusing on the work of his institute, traveling to Africa to promote a partnership to fight cervical and breast cancer in sub-Saharan Africa, and holding events to honor the nation’s troops, including joining them on bike rides across rugged Texas terrain.
George W. Bush President Center, http://www.georgewbushcenter.com
The U.S. economy probably grew more slowly at the start of the year than at the end of last year. But it’s expected to grow faster for all of 2012 than in 2011.
The government on Friday will make its first estimate of growth for the January-March quarter. The consensus forecast is that gross domestic product — the output of all goods and services, from cars to electricity to manicures — grew at a 2.5 percent annual rate, according to a survey of economists by FactSet.
That would be slower than the 3 percent GDP growth in the final three months of 2011. Much of the growth in the October-December quarter was due to businesses aggressively restocking their supplies. The pace of restocking is expected to have declined last quarter.
Trade probably also slowed growth last quarter. U.S. manufacturers are finding it harder to sell products overseas because of Europe’s debt crisis and weaker growth in Asia.
On the other hand, the January-March quarter likely benefited from the milder-than-normal winter. It probably led consumers and businesses to step up spending earlier in the year than they typically do. Consumer spending, in particular, is critical because it accounts for about 70 percent of economic activity.
Many economists predict growth will strengthen in the second half of this year because they think hiring will continue to improve. Job growth has helped drive the unemployment rate to 8.2 percent in March from 9.1 percent in August and given households more money to spend.
“I am looking for steady but not spectacular growth this year,” said Joel Naroff, chief economist at Naroff Economic Advisors. Naroff thinks the economy will grow 3 percent for all of 2012.
That would be nearly double the anemic 1.7 percent growth in 2011. The economy expanded 3 percent in 2010, the first full year of the recovery after the Great Recession officially ended in June 2009. In 2009, economic output had shrunk 3.5 percent.
Last year began with signs of healthier growth. But then the economy endured a series of shocks. Gasoline prices surged after political unrest triggered by the Arab Spring. The earthquake and tsunami in Japan slowed the flow of supplies to U.S. auto plants and other factories. And the European debt crisis and a standoff over raising the federal borrowing limit unsettled investors.
Gasoline prices have risen again this year. But the effect on consumer spending so far has been less. In part, that’s because a warm winter meant families didn’t have to spend as much to heat their homes.
Also, consumers this year have reduced their debt loads. Housing is inching back. State and local governments aren’t cutting as much. Banks are lending more. And the threat from Europe’s debt crisis has eased somewhat.
“Last year, high gas prices did a lot of damage,” said Mark Zandi, chief economist at Moody’s Analytics. “But consumers seem to be weathering the impact of higher prices much better this year.”
Zandi said one factor that might hold back growth this year is a reluctance by some businesses to expand and hire until uncertainty over taxes and government spending is resolved.
That uncertainty could last most of the year. Congress and the Obama administration aren’t expected to resolve their differences until a lame-duck session of Congress begins after the November elections.
The Bush-era tax cuts and a reduction in Social Security taxes will expire at year’s end. And in January, across-the-board spending cuts would take effect unless Congress achieves a budget agreement by then.
“There is a lot of uncertainty with regard to future tax policy and future spending policy,” Zandi said. “That is causing businesses to be cautious.”
The government makes three estimates of the GDP for each quarter. Each revision is based on more complete economic data.
BMI forecasts that Slovakia will account for 1.16% of Central and Eastern Europe (CEE) regional powergeneration by 2013, and remain a modest net exporter of electricity to neighbouring states such asHungary. CEE power generation in 2008 was 2,610 terawatt hours (TWh), representing an increase of1.35% over the previous year. We are forecasting a rise in regional generation to 2,884TWh by 2013,representing an increase of 10.51%.Thermal power generation in 2008 was around 1,342TWh, accounting for 51.42% of the total electricitysupplied in the region. Our forecast for 2013 is 1,384TWh, implying 3.11% growth that reduces onlyslightly the market share of thermal generation to 47.99% – in spite of environmental concerns promotingrenewables, hydro-electricity and nuclear generation. Slovakia’s thermal generation in 2008 was 8.2TWh,or 0.61% of the regional total. By 2013, Slovakia is expected to account for 0.72% of thermal generation.Gas was the dominant fuel in Slovakia in 2008, accounting for 28.4% of primary energy demand (PED).Gas was followed by oil at 23.6%, coal at 21.7%, nuclear at 20.8% and hydro weighing in with 5.5% ofPED. Regional energy demand is forecast to reach 1,518mn tonnes of oil equivalent (toe) by 2013,representing 11.84% growth over the period. Slovakia’s 2008 market share of 1.33% is set to ease to1.32% by 2013. In 2008, Slovakia accounted for 4.73% of regional nuclear energy consumption, with aforecast market share of 3.98% by 2013.Slovakia now shares eighth and last place with Ukraine in BMI’s updated Power Business EnvironmentRating, behind even Hungary. Hungary is probably within Slovakia’s reach over the medium-term, and itshould be able to pull away from Ukraine during the next few quarters. The current score reflects themodest size of the country’s electricity market and infrastructure, a low level of population growth, plusits high level of import dependence. Country risk factors offset the industry scores to some extent.BMI now forecasts Slovak real GDP growth to average 1.46% per annum between 2009 and 2013,although the 2009 estimate is for a decline of 4.20%. Slovakia’s population is expected to remain around5.4mn until the end of the period, and GDP per capita and electricity consumption per capita are forecastto increase by 5.7% and 1.6% respectively. The country’s power consumption is expected to increasefrom an estimated 26.4TWh in 2008, to 26.8TWh by the end of the forecast period, while theoreticalsurplus output should rise to a forecast 6.7TWh in 2013, assuming 3.0% annual growth in generation.We forecast an increase in Slovakian electricity generation of 33.7% in 2008-2018, which is towards thetop of the range for the CEE region. This equates to 17.7% in the 2013-2018 period, up from 13.6% in2008-2013. PED growth is set to rise from 10.5% in 2008-2013 to 15.0% in 2013-2018, or 27.1% overthe forecast period. An increase of 50% in hydro-power use during 2008-2018 is a key element ofgeneration growth. Thermal power generation is forecast to rise around 35% over the period, with nucleardemand up almost 29%. More details of BMI’s long-term forecasts can be found later in this report.
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