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Politics : View from the Center and Left
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To: JohnM who wrote (125474)11/24/2009 10:31:10 AM
From: JohnM  Read Replies (2) of 542456
 
More of Krugman's mission.
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November 24, 2009, 9:00 am
Gee, that’s De Pressing

Second estimate of third-quarter GDP out; growth rate marked down to 2.8%.

This is really quite grim. At this growth rate it’s far from clear that we’re doing anything to reduce the output gap — the gap between what the economy could produce and what it’s actually producing. Correspondingly, there’s no reason now for even a bit of optimism on unemployment.

When the 3.5% advance number came out, I took to warning people that even if the economy continued to grow at that rate, we wouldn’t see anything like full employment until late in Sarah Palin’s second term. Given the latest number, the date at which we can expect to see a return to full employment is … never.

And that’s if growth continues at this rate. The odds are good that growth will slow down next year: the stimulus has already had its peak effect on growth and will turn into a net drag in the second half, the inventory bounce — which was a major factor in 3rd quarter growth, such as it was — will fade out.

Basically, we may be in a technical recovery, but we’re not recovering.

And meanwhile, what is Washington obsessed with? Phantom menaces.

krugman.blogs.nytimes.com
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