The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

12.8 Trillion Spent: Economy Shrinks 6.1%

Posted by iusbvision on April 29, 2009

Bloomberg news is where we got the 12.8 trillion number and we wrote about this HERE. Housing demand is still really bad and there has been no serious attempt to fix housing by the government and now we are pushing into May. Government seems to be using this crisis to take control of the banks and it has also proposed taking 51% ownership in GM (LINK).

Yahoo/AP:

WASHINGTON (AP) — The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer spending.

The Commerce Department’s report, released Wednesday, dashed hopes that the recession’s grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 percent annualized decline.

Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter-century, contracting at a 6.3 percent pace. Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs.

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