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What recovery should look like
What recovery should look like
Yes, 3.5 is a lot better than zero. But what we need is a string of numbers about twice that high.
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Weekly Summary
Calculated Risk — ... and the updated Unofficial Problem Bank List. October Economic Summary in Graphs Unofficial Problem Bank List Grows to 500 A guest post from albert: On a New York bankruptcy case in the news: In re Olga: of Bankruptcy and Foreclosure **************************** On the GDP report: From Rex Nutting at MarketWatch: U.S. GDP rises 3.5% as stimulus kicks in From Paul Krugman: What recovery should look like From Jim Hamilton at Econbrowser: A welcome GDP ...

"A Shaky Start"
Economist's View — ... that at this rate, “we wouldn’t reach anything that feels like full employment until well into the second Palin administration”). The recovery period from past recessions were associated with output growth rates of 6-7%, enough to resume the level of growth that existed before the crisis, and to make up for losses in a reasonable amount of time. If those losses had not been recovered, if the level of output had been permanently lower instead of just a temporary deviation from its long-run trend, then employment and income would have also been permanently lower.  ...

"A Shaky Start"
Economist's View — ... that at this rate, “we wouldn’t reach anything that feels like full employment until well into the second Palin administration”). The recovery period from past recessions were associated with output growth rates of 6-7%, enough to resume the level of growth that existed before the crisis, and to make up for losses in a reasonable amount of time. If those losses had not been recovered, if the level of output had been permanently lower instead of just a temporary deviation from its long-run trend, then employment and income would have also been permanently lower.  ...

Point of Clarification
The Bonddad Blog — ... (I see Paul Krugman has a post up at his blog that speaks to the points I'm trying to make. It addresses what recovery "should" look like, and cites ...

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Paul Krugman: Too Little of a Good ThingEconomist's View
We need to do more to stimulate employment and the economy , but the political climate is unfavorable: Too Little of a Good Thing, by Paul Krugman, Commentary, NY Times : The good news is that the American Recovery and Reinvestment Act, a k a the Obama stimulus plan, is working just ...