Bad economic forecast for USA

It seems to me that economists are afraid to tell the truth. The forecast looks bad but the commentary is even worse:

The economy will likely avoid a formal recession, but its outlook through the end of next year is decidedly “subprime” with the deep housing downturn restraining growth to just above 1 percent, a UCLA Anderson Forecast report released on Wednesday said.

A “witch’s brew of the popping of the housing bubble, a wounded financial system and increasing inflationary pressures coming from rising commodity prices will keep the economy on a subprime growth path for the next several quarters,” according to the forecasting unit’s report.

What he said amounts to a doctor saying “Son, we figured it out! Your headaches are caused by pain above your shoulders.” This type of superficial economic analysis is passed off all of the time and most people do not even notice. It keeps the ball rolling and diverts attention away from the source.

The truth is that this “subprime” mess is all caused by The Fed printing lots of money backed by absolutely nothing. The Fed printed money to “stimulate” the economy and to finance expenses (for instance, a war) for which raising taxes would be a politically difficult sell.

Despite what the socialists would have you believe, you can not make something out of nothing. However, you can certainly confuse people about the real value of assets in the short run thus provoking poor business decisions on a larger scale. So, instead of financing public expenses by taxing Americans in an accounting sense, Americans are being taxed by price inflation, rising unemployment, credit crunches and decreasing economic growth. What a fantastic mix.