The Left has hurt us too much to come back the way we should.
WSJ on 'The Recovery So Far'
By TBlumer on Taxes & Government
Highlights:
Growth is about half as strong as it was after the last deep downturn.
President Obama yesterday hailed the first quarter growth rate of 3.2% as "an important milepost on the road to recovery," and let's hope he's right. From our own current vantage point, the first quarter numbers reveal a respectable cyclical recovery, though one that is so far less robust than we'd expect after an especially deep recession.
One way to judge the strength of a recovery is to compare it to the growth after downturns of similar severity. The best recent comparison to the recession of 2008-2009 would be that of 1981-1982. They had different causes—interest rate increases in 1981 and a financial shock in 2008—but both periods had steep declines in output and jobless rates that hit 10%.
The 1982 recession officially ended in November, and the recovery came roaring out of that year, gaining momentum throughout 1983 and carrying 8% growth into 1984 with an expansion that lasted six more years.
… By comparison to that boom, the current recovery has been about half as strong.
But it's also worth noting another less than favorable contrast with the recovery of 1983: government policy. The full incentive-enhancing impact of the 25% Reagan reduction in marginal tax rates finally kicked in on January 1, 1983, and Paul Volcker's Federal Reserve was starting to cut interest rates from the record highs that broke the back of inflation while causing the recession. At the same time, an era of deregulation was lowering costs across most industries. The groundwork for a durable expansion had been laid in lower taxes, lower inflation and lower business costs.
In the current recovery, the policy headwinds are very different. Taxes are set to rise significantly on January 1, 2011, and the political class is signaling the need for still more taxes to pay for the costs of stimulus and the expanding entitlement state.
… Regarding its (the recovery's) strength and duration, the jury is still out.
It should also be noted that the economy was adding lots of jobs by the first quarter of 1983, the first strong quarter of recovery, while the POR (Pelosi-Obama-Reid) economy continued to shed seasonally adjusted jobs during its first strong quarter of growth in 4Q09. Growth through tax cuts and lower regulation in 1983-1984 clearly outperformed what we have seen thus far in 2009-2010. |
