How's That Recovery Doing?
The recent correction in the markets probably have most people questioning the recovery. Unemployment claims shot up last week, which was not a surprise to me given all the layoff talk I've been hearing. But even if one doesn't believe we'll have a "double dip," how anyone can think we're going to grow our way out of trouble is beyond me.
The last recession we had like this was in the early 80's - I'll call that the Carter/Reagan recession. We certainly grew our way out of that one (but even today there is debate over whether the recovery was truly deep enough for the vast middle-class - I'll leave that debate aside). This one however features levels of debt unimaginable at that time - so we're going to need even stronger growth to get out of this mess. Here's a comparison of the two recessions - baselining each at the last quarter that showed growth before the decline in GDP set in:
Look like we have much of a chance to grow out of that nice hole we dug?
The last recession we had like this was in the early 80's - I'll call that the Carter/Reagan recession. We certainly grew our way out of that one (but even today there is debate over whether the recovery was truly deep enough for the vast middle-class - I'll leave that debate aside). This one however features levels of debt unimaginable at that time - so we're going to need even stronger growth to get out of this mess. Here's a comparison of the two recessions - baselining each at the last quarter that showed growth before the decline in GDP set in:
Look like we have much of a chance to grow out of that nice hole we dug?
posted by ziel | 5/22/2010 02:19:00 PM
1 Comments:
Back in the Great Depression recovery was always just around the corner and, in truth, there were a few periods in which the optimists seemed to be justified (until the economic fundamentals reasserted themselves). Now we've got Europe teetering on the edge of a meltdown and the usual suspects are still talking recovery. I'll pass on the optimism.
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