ComScore said that the highly variable growth rates in the final two weeks (extremely high in the penultimate week and extremely low in the final week) are primarily a function of the way the calendar fell in relation to Christmas.
This is because the rate of economic growth is the only variable that really matters when it comes to federal finances.
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Decelerating growth with increasing fixed and variable costs does not bode well for future profitability.
The other key variable is the growth in game streaming through services such as TwitchTV and own3d.tv.
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Although current income has been a recent key driver of stock returns of cash-rich companies and has generated more certainty for investors, growth in earnings is much more variable and uncertain.
Instead, the stagflation of the 1970s revealed that high and variable inflation causes unemployment to rise and growth to slow.
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Bottom line, the budgetary rules treating growth as a given instead of the all important variable for achieving budget balance have both sides of the aisle ignoring the most important question: What policy changes would achieve a sustained period of 4% growth?
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The increase in fulfillment centers can be viewed as an investment in future growth and perhaps margins assuming better efficiencies, but an increase in variable costs per revenue can signal permanently declining margins.
Progress on monetary reform is the overlooked, all important variable that will shape the outlook for financial markets, economic growth and the prospect for balancing the budget of federal, state and local governments, to say nothing of the budget of the average American family.
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Now that Italian Prime Minister Berlusconi has caved in on calls to raise the capital gains tax, wealth taxes and VAT taxes, the European debt variable likely holds more pain ahead as the on-going anti-growth fiscal bias on the continent will lead to slower growth and falling government tax revenues as a result.
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