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Faster "Economic Reversal" than 2008?
Signs that the economic downturn is speeding up

By Bob Stokes
Fri, 09 Sep 2011 14:45:00 ET
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It's sobering to think that the economy today could deteriorate even more swiftly than it did in 2008.
Yet there's evidence which points in that direction.
Consumer confidence is falling fast, for example. The August Consumer Sentiment Index fell to its second lowest figure in over 30 years. And even before that figure published, the August Financial Forecast warned subscribers to expect the consumer confidence downtrend to continue:
"The consumer accounts for the bulk of buying in the U.S. economy...the University of Michigan Consumer Sentiment Index, which is similar to the Conference Board’s Consumer Confidence Index...are locked in downtrends and carry the same bearish implications."
Consumers are cash-strapped and confidence is low. That's not a promising combination for the economy in the months ahead.
Another disturbing fact is that what little growth the U.S. economy does have comes mainly from Uncle Sam. And as we know, the government does a poor job of sustaining such growth. Any real recovery must come from the private sector, yet the private sector's contribution to the GDP topped four years ago. This is also from the August Financial Forecast:
"...GDP growth is mainly reliant on government spending...private sector GDP topped in 2007, right along with the all-time peak in the Dow Jones Industrial Average. Only government spending has increased."
Please see the chart below:
Federal stimulus has not restored health to the economy. And there's no reason to believe that yet another round of government action will do so either. 

There's yet another indicator that our economic deterioration might very well accelerate more rapidly than what happened in 2008.

You can see this indicator for yourself, in the chart on page 8 of the September Financial Forecast. It shows a "drop-off" so steep that "economists should start abandoning their theories about a 'soft patch.'" See this chart in moments by following this link>> 

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