NEW CASTLE —
The nation’s economic data revealed a surprise for the last three months of 2012.
And an unwelcome surprise at that.
America’s Gross Domestic Product, the broadest measure of economic activity, fell slightly in the final quarter of the year.
While the decrease was a small 0.1 percent, it definitely is not the direction we want to see the economy heading.
We suppose you can take comfort in the assessment by many economists, who said that data was a bit of a fluke. Two key areas weighing heavily on the GDP figure were a drop in inventories — likely linked to the Christmas season after merchants had built up supplies — and a decrease in government spending. That’s something not expected to reoccur.
But is that true? Remember all that talk at the end of the year about the fiscal cliff and scheduled cuts in government spending if Republicans and Democrats couldn’t get their acts together in Washington? Well, the deadline for those cuts was delayed for a couple of months, not resolved. Late this month, the same concerns may arise.
Meanwhile, recent government surveys show a drop in consumer confidence in the United States. This is a crucial figure, because consumers contribute to about two-thirds of the nation’s overall economy. If they decide to trim spending out of concern for the future, growth will be impacted negatively.
It’s worth asking why consumers, amid an apparent recovery, would express a lack of confidence. The explanation is obvious: Consumers were reacting to the nonsense in Washington. The fiscal cliff debacle would shake anyone’s confidence in this nation’s political leadership.
That’s the lesson here for federal officials. They may like to posture for their perceived constituencies. But we suspect those constituencies will evaporate if Washington’s intransigence produces a return to recession.
What happens in Washington isn’t simply politics and entertainment. It plays a major role, economically and psychologically, in terms of where the nation as a whole is headed.
If individuals and businesses are worried about government direction (or the lack of one), they will scale back and go into defensive mode. That will have harmful economic consequences.
Meanwhile, we also would point out last quarter’s GDP decline was linked to decreased government spending. For America to reduce its deficit — something that must be done — federal spending cuts are necessary.
But they need to proceed in a rational, sensible manner. Haphazard actions such as the fiscal cliff aren’t the results of sound public policy. They are symbols of failed leadership.
The GDP numbers and related economic data are warnings to Washington to shape up. Or else.
Editorials
Our Opinion: Decline in GDP serves as message to Washington
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Our Opinion: State audit says city school district failed to collect from non-residents
Audit information about non-resident students who didn’t pay tuition at New Castle raises more questions than it answers. At least so far. We expect more details when the Pennsylvania auditor general’s office completes its report and the New Castle school district provides its response.
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Our Opinion: Make the most of your power to vote by casting ballot tomorrow
So what kind of turnout will there be for tomorrow’s primary? Recent history suggests somewhere between low and lousy. This year’s elections are devoted to local races, and there are few major ones being contested in the primary.
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Our Opinion: Privatization of county jail is worthy of examination
Generally speaking, we support government efforts to seek more efficient ways to provide essential services. So we have no problem with the decision by the Lawrence County commissioners to solicit proposals for the private operation of the county jail.
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Our Opinion: We endorse candidates for New Castle board
The New Castle school district is often a study in contrasts. There are complaints about the district on everything from taxes to nepotism, from test scores to ethical slights. Yet at the same time, plenty of students within the district excel. It’s a tribute to the hard work of those students, their families and the educators who support them.
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Our Opinion: You should be frightened, outraged by IRS abuse of power
When people talk about government posing a threat to citizens, a common topic these days is unmanned drones. But a more credible threat may be the Internal Revenue Service. This agency, responsible for collecting taxes and enforcing related rules, has the ability to make life miserable for the average individual.
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Our Opinion: Our endorsements for City Council race
The city of New Castle needs help. Financially distressed and operating under Pennsylvania’s Act 47, New Castle must find ways to reverse its population loss and fiscal challenges.
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Our Opinion: Court frowns on gerrymandering, but only slightly
Pennsylvania legislators have received the green light to put their own political interests ahead of yours. That’s a key point in the latest Pennsylvania Supreme Court ruling on legislative apportionment in the commonwealth.
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Our Opinion: Study says distracted driving deaths are under reported
Suppose you operated a piece of heavy machinery at your job. And suppose it’s machinery that moves quickly with little effort. What would happen if you decided to take one hand off that equipment — while it was still in motion — and instead focused your attention on a telephone call?
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Our Opinion: Senate seeks to give states more taxing power
Congress is taking a stab at tax fairness. At least, where states are concerned. If you’re looking for meaningful reform of the federal tax code, that’s going to have to wait.
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Our Opinion: Look at handling of bombing suspects is warranted
We welcome an investigation into the handling of intelligence related to suspects in the Boston Marathon bombing. That probe may reveal little of value.
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Our Opinion: State audit says city school district failed to collect from non-residents
