22 September 2010

Why is this recovery so weak? "This time you've got me."

According to the National Bureau of Economic Research, the "Great Recession" ended in June of 2009. Why does that bit of policy arcana matter?

In June, 2009, not one penny of the American Recovery and Reinvestment Act, aka, "Stimulus," had been spent. Our government spent 862 billion dollars to stimulate and economy that was already out of recession.

What did we get for our money? Persistent unemployment hovering just below 10% and a stagnant growth rate.

Historically, recovery period growth has been explosive. This time, it hasn't.

What's the difference? Well, to quote President Obama in a different context, "The big difference here (is) you've got me."

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