April 5, 2021
It seems the U.S. economy is set to take off.
The Commerce Department reported in February that fourth quarter 2020 gross domestic product (GDP) rose 4.1 percent, which was stronger than anticipated. As a result, many forecasters are raising their growth expectations for 2021.
Goldman Sachs just increased its GDP forecast to 6.8 percent for the year. If that projection is correct, it would be the strongest year of U.S. economic growth since 1984, when GDP rose 7.2 percent. The Bank of America 2021 estimate calls for 6.5 percent growth, also the highest level in 36 years.
Both institutions are basing their latest upgrades on the assumptions that the latest stimulus package will stuff Americans’ accounts even more, COVID-19 vaccinations will increase, the economy will fully reopen, and the U.S. unemployment rate will fall sharply as a result. Of course, they’re also betting on Americans being confident enough to spend stimulus checks this time around.
Unfortunately, it seems it’s the modern way to not let a crisis go to waste. It’s my opinion, and others agree, that we did not need another stimulus program, especially not a massive $1.9 trillion boondoggle, most of which is not going to be spent on COVID-19.
Certainly, the GDP news is encouraging and could lead to more employment. That is excellent, to be sure. However, it makes you wonder why we need to pile on more debt.