Tuesday, July 20, 2010

History Be Not Ignored

Bonddad provides an interesting correlation between the last three recoveries in the U.S. :

1.) From a GDP growth rate perspective, this recovery has printed stronger than the last two recoveries at the same point in the recovery.

2.) Post-recovery employment has been a big problem for the last three recoveries.

Then the question is, why when attempting to recoup the economy, do the powers that be consistently refuse to address the struggling unemployment rate?

I am Frank Chow and I approved this message

1 comment:

Steve said...

I suspect the big difference is that in the last three recoveries we had either a Republican president or a high and rising deficit. If we didn't have such a huge debt it would be easier to justify spending some money in the short run because we'd not be digging that big of a hole. But when the hole is already quite large digging a little deeper meets stronger resistance.

Having said that, the irony here is that if we spent that money it would boost GDP and we'd end up having higher tax revenue down the line that would help offset the expense. But no, instead, we languish. Worse, the unemployment rate is one of the key things that makes people think of a possible double-dip. Whether we do that or not, people fearing that possibility aren't spending money and slowing recovery.