RUSH: Do you know, ladies and gentlemen, the economy in the fourth quarter, they told us, grew at a rate of 1.1%, I think is what they said. But it turns out that's not the case. The economy actually contracted, gross domestic product. "The US economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus."
That's what's gotten us into this problem. Anyway, the economy shrunk. You know what the Democrats are out saying? This is the best looking contraction that there's ever been in this country. And, of course, the media's repeating that. That's not a surprise to you and me. But nevertheless, it is incredibly serious. And you remember what this administration's growth forecasts were for the next three to four years. Their growth forecasts were anywhere between three and four and a half percent. Our growth rate is below the ChiComs. Our growth rate is below Cuba. We're not growing now. The fourth quarter we actually contracted.
That means that the employment situation isn't changing. That means wages aren't changing positively. There's no growth in people's incomes. It's just sad to watch this happening right in front of our eyes. The inflation rate is at least 2%, probably higher than that. So a casual calculation here, a 0.1% GDP contraction could mean that for all intents and purposes we're back into a recession. What do you need, a couple or three quarters in a row for that to be officially proclaimed?
I'll tell you, if there were a Republican in the White House, we'd be in a recession. If there were a Republican in the White House, we'd never have come out of the recession. If there were a Republican in the White House, there would be a depression. If there were a Republican in the White House and all this was going on, we'd be doing impeachment hearings by now. I don't know what more the Federal Reserve can do. They've already shoveled $85 billion a month into the financial markets. That's why the stock market's doing well. The artificial rise in the stock market, that's what QE2 is, the Fed buying securities or making money available to buy stocks. And everybody's buying stock except Apple.
RUSH: Back to the AP story on GDP. This is amazing, too. Economic growth contracted, the GDP contracted by one-tenth of 1% in the fourth quarter. Now, listen to this from AP. "That is a sharp slowdown from the 3.1% growth rate in the July-September quarter." What they're not telling you is -- you may not remember this -- in the fourth quarter there was a whole lot of economic stimulus, quote, unquote, to cover for Obama's tax increases. There was all kinds of stimulus so his reelection effort wouldn't be harmed, and it still resulted in a contraction. And listen to this next sentence from these wizards of smart at AP. "The surprise contraction..." Are you surprised that our economy is collapsing on itself? You're not, are you? The wizards of smart at AP are. Listen to this.
"The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts." Really? I thought tax increases were great for the economy. That's what the news media and the Democrat Party has been telling us. Same thing with unemployment benefits. I thought that was great for economic growth. What happened to that? The surprise contraction could raise fears about the economy's ability to handle tax increases. You mean they've known all along at AP that tax increases slow down the economy? They've known that all along, and they've been lying to us about it, and now that we're contracting they're worried, openly admitting they're worried?
RUSH: Here's an excerpt from the White House response to the economy collapsing in the fourth quarter. It's from Alan B. Krueger, who's chairman of the Council of Economic Advisors. Here's the excerpt. Quote: "Today’s report is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy. The administration continues to urge Congress to move toward a sustainable federal budget in a responsible way that balances --" Let's see. Sustainable, responsible, balance. It's got every Obama code word in there. "-- balances revenue and spending, and replaces the sequester, while making critical investments in the economy that promote growth and job creation and protect our most vulnerable citizens."
In other words, the White House says we need more taxes and more spending. That's what critical investments in the economy are that promote growth. They're talking about promoting growth. We're shrinking! If we got a growth rate of minus one-tenth of 1% added to inflation, which is, what, two and five percent, folks, the growth rate is really collapsing. It's not just one-tenth of 1%, when you factor inflation, and here these guys come now asking for more investments to promote growth? There isn't any. There's nothing that they are doing that promotes growth. And we know this. And, by the way, I continue to say it's on purpose.
Look, we're running trillion-dollar deficits. The Democrats, they're just saying again today that we're not spending enough money to stimulate the economy. I want to remind you again that when the economy collapsed in the fourth quarter, payroll taxes were lower than they are today. The economy collapsed before payroll taxes went up. The payroll tax, the end of the partial payroll tax deduction means that the average American has a hundred dollars a month less disposable income. But in the fourth quarter, when the economy contracted, the average American had that hundred dollars. That hundred dollars was taken away with the tax increase, which Obama said would never happen, by the way, in January.
So if the economy collapsed before Obama's tax increases, what is happening now? By their own definition, we should be growing to beat the band now because taxes went up. And don't forget, Pelosi and the Democrats all say that unemployment benefits equal rampant economic growth. And we extended unemployment benefits, and I don't see economic growth. Meanwhile, what really is important today is taking away your guns. As we are whipsawed back and forth, one issue to the next, one crisis, disaster to the next, somehow the economy is always left out of the whipsaw. It's guns, it's gay marriage, it's gay rights, and the Boy Scouts deciding that it's old-fashioned not to let gays in, so gays will be in leadership positions.
We got new tax increases headed down the pike. We're gonna take guns away from you if we can. It just continues to roll on.
CALLER: Surrounded dittos, Rush.
RUSH: Surrounded. I feel you. I know what you mean.
CALLER: I think it's something that we got this number on the GDP a week after inauguration.
RUSH: Well, I know what you mean, but there's no way the fourth quarter -- what difference would it make if it came out before the inauguration? Nothing is gonna stop that.
CALLER: Well, the numbers, I think they've been massaged all along. I haven't seen an improvement since this all began.
RUSH: Well --
CALLER: I am in Georgia, and Georgia is probably still reeling from real estate, but no --
RUSH: You actually think that federal agencies would manipulate and lie about numbers --
RUSH: -- to cover up bad news to help elected officials?
CALLER: Yes, no question.
RUSH: You really think that? You have no doubt that that could happen?
CALLER: How can you have a doubt? They're from Chicago.
RUSH: Yeah, I know, they're from Chicago. It is curious, is it not? I know what you mean. Where's all this bad news before the election? By the way, there is some news that has dramatically worsened since the election that could have been reported before the election. I can't remember off the top of my head. We had a couple stories this week this week alone. But the fourth quarter growth rate, this is a hell of a revision, folks. The projected fourth quarter growth rate was 2.2%, I think.
The Obama administration, in their economic documents that they've submitted, budgets and what have you, have forecast economic growth the next four years to be anywhere between 3.5 and 4.5%. And the fourth quarter last year was projected to grow at 2.2 and maybe the preliminary number was that. I think it's 2.5, actually. Here comes a contraction of one-tenth of a percent. They're only off by 2.6% here. That's a big percentage to miss, to be off. But of course this Democrat spin today is this is the best looking contraction we've ever had because of the reason. This is actually a good contraction because this contraction is the result of spending that is helping people.
I kid you not. You can look it up to Drudge. It's on his front page. It's at the top of his front page. This is the greatest looking contraction we've ever had, 'cause we've been spending money here really helps people. So what does it matter that the economy is not growing? What does it matter that Amazon is losing money? As long as customers are happy, and as long as the investors are happy, what does it matter that Amazon's losing? So what if the economy's shrinking. We're taking care of people here. That's what the Democrats' reaction to all of this is.
By the way, speaking of economic growth and contraction, it's only gonna get worse. I mean it's mathematics. There are more tax increases coming. And don't forget the wizards of smart at AP when they reported this contraction story today. Let me find this for you. This is too good. This is too good. Listen to this. "The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming spending cuts."
So here's the AP worried, "Oh, no. The economy's contracting, oh, my God, we might have trouble handling these tax increases." Wait a minute. I thought AP and other Democrats and liberals have told us that tax increases are good for the economy and that unemployment extension, benefit extension, is good for the economy. I thought that every dollar of unemployment compensation generated $1.73 in economic activity, or growth. And yet with all these tax increases and all this unemployment compensation that we're paying, the economy contracted. It shrunk. And in the third quarter, July-September, the calendar third quarter, they reported the economic growth of the country at 3.1%. So the calendar third quarter, we're down 3.2% just since September.
And so now AP, I love this: "The surprise contraction could raise fears..." Could? Ha! "...about the economy's ability to handle tax increases." What they're really admitting here now is that they've known all along that tax increases retard economic growth. Uh, uh. Sorry, sorry. I take it back. I didn't mean to use retard. Slow down economic growth. I'm really sorry, folks, I am terribly sorry. I did not mean to use the word "retard" there. I just meant slow down. Okay. They're admitting here that tax increases slow down the economy. Now, all during the run up to the election, they didn't say that. The last four years they never said that. In fact, remember in 2010 when the Bush tax cuts were almost ready to expire and Obama said, "We can't let those tax cuts expire. We would slow down the economy."
So every now and then the Democrats and the media will admit the truth about tax increases, that they slow down the economy. Most of the time they tell us how good they are, how fair, how necessary, because they're only on the rich, don't you see. Ha. Yes. Only on the rich. And yet every American is down minimum a hundred dollars a month because of the payroll tax increase that happened on January 1st. Anyway, now they're worried. There's a whole bunch of tax increases coming because of Obamacare, folks, and the AP is, "Oh, no." They're worried, can the economy withstand those tax increases? No, it can't. Let me help them out. It can't. The mathematics is what it is.
RUSH: I have a question, ladies and gentlemen. The economic growth rate -- reported, anyway -- by our government, at the end of September, was 3.1%, at the end of the calendar third quarter. So after September, of course, comes October, November, December. That's the calendar fourth quarter. So from September to the end of the year the economy went from growing at 3.1% to contracting by 0.1%. So the economy fell 3.2%.
Now, what happened between October, November, and December that might have had something to do with this? Let me think. October, November, even December you got Christmas and holiday season, that's supposed to be big for the economy. They told us, ladies and gentlemen, we were told that after Obama won reelection, the economy was gonna take off because uncertainty would be removed. In fact, they said that one of the reasons the economy was sorta chugging, not really speeding along, was all the uncertainty over who was gonna win the election and what policies would then flow; but then after Obama won, that's the end of uncertainty. Everybody would know what's ahead and the economy would take off.
Well, obviously Obama won the election, and the economy tanked. Hmm. I wonder why. I looked over at TMZ, Entertainment Weekly, I didn't see anything about the GDP contracting, by the way. I've looked at the E! Entertainment website, a number of low-information sites, nothing there yet about the economy contracting. The only thing that's the big news over there right now is that Lindsay Lohan panicked on a first class flight to Los Angeles.
"Lindsay Lohan and her mom Dina took the last flight out of JFK last night and jetted to L.A. after being warned she'd be a wanted woman if she was a no-show in court this morning. Lindsay -- who is not just broke but deeply in debt -- waited in her car at the airport until the last minute ... then flew first class on American Airlines and landed at around 12:30 AM."
TMZ broke this story. This is huge. Ahem.
"Lindsay had no intention of showing up in her lying-to-cops case and got a doctor's note which was filed with the court."
And then Kris Humphries is crying fraud regarding his so-called marriage to Kim Kardashian, and he's refused a $10 million payoff. This is the news over at TMZ and the E! Entertainment network. Nothing about the economy yet over on those websites. But the really big low-information news right now is that Lindsay Lohan is in court even as we speak. It has 'em all captivated out there.
So I don't know what happened between October and December to cause the economy to tank, but it did.