U.S. Representative Kevin Brady (R-TX), the Chairman-designate of the Joint Economic Committee, released the following statement on the new economic data which shows America's economy shrank for the first time in three and a half years:
"This stunning contraction can't be blamed simply on defense spending ahead of sequestration or uncertainty over the fiscal cliff. It's a case of acceleration.
Defense spending was accelerated into the third quarter of last year which artificially boosted the economic growth ahead of the November election to 3.1%. As a result, the fourth quarter sagged into a 0.1% decline. Sequester is not to blame - defense spending in the last two quarters averaged about the same as defense spending in the first half of the year.
Similarly, business investment accelerated into the fourth quarter due to market concerns about the President's higher taxes in the new year. That means the economy will likely suffer in the first quarter of 2013.
The bottom line is that America's economy continues to struggle primarily due to President Obama's penchant for political brinkmanship and the pervasive uncertainty caused by his focus on higher taxes, regulation and ObamaCare. While consumer spending and government spending are both above pre-recession levels, business investment is not. That's the missing ingredient in this anemic recovery.
This president's recovery ranks near the bottom in Main Street job creation. We are still three million jobs below the pre-recession peak of January, 2008 and 3.8 million jobs short of an average recovery. The President has no one to blame for that but his own poor leadership."
NOTE: Real GDP has grown at an annual rate of 2.1% over the past 14 quarters. The average growth rate over a comparable period for the nine other post-World War II recoveries was 4.7%. Real GDP is $1.3 trillion lower than it would be if this recovery had matched the average of recoveries since WWII.
Joint Economic Committee staff analysis estimates that in order for President Obama to meet just the average recovery rate of his predecessors, the U.S. economy would need to grow at a rate of 5.5% for the rest of his presidency.