US Slowdown Intensifies Global Economic Crisis

By Patrick Martin
28 April 2012

US economic growth slowed in the first quarter of 2012, with gross domestic product rising by only 2.2 percent, according to figures reported by the Department of Commerce Friday. The figure was well below the consensus forecast of 2.6 percent among corporate economists surveyed by Dow Jones Newswires.

The figure suggests that job creation in the United States will remain in the doldrums, and that the unemployment rate may rise above the current official level of 8.2 percent, after falling from 9.1 percent over the past six months.

It comes as the global capitalist economy continues to stagnate, with the major economies of Europe—Germany, Britain, France, Italy and Spain—all either entering a double-dip recession or on the brink of doing so. Japan is also in recession, and economic growth in China and India has slowed significantly, well below the 10 percent rates of recent years.

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World capitalism remains poised on a knife-edge, threatening a renewed global financial crisis that could be triggered by potential shocks, whether debt defaults by Greece and a half dozen other countries in the eurozone, a financial implosion like the Lehman Brothers collapse in 2008, or the outbreak of war in the oil-rich Middle East or some other international flashpoint.

The Commerce Department report shows that the United States cannot serve as an engine of global economic recovery, as it did in decades past. American corporations are awash with cash—an estimated $2 trillion at least—but they find it more profitable to buy back their own stock than to invest in production.
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