Tuesday, December 11, 2012

CBO: Economic Recovery not Guaranteed

There is nothing to suggest that the economy will get better in the foreseeable future. We have a government and economy that is dysfunctional. Corporations are simply hording money and not investing in the economy. Workers are working longer hours for less pay. Assuming they have a job. This means no consumption. Which is essential to economic growth. Disaster only looms ahead:

One effect of the Great Recession was to massively widen the gap between the amount of wealth the economy could be producing and what it actually was producing. GDP production dropped almost $1 trillion from its pre-recession trend line, and between 2008 and 2011 the United States lost around $3.6 trillion.

CBO’s “current law” baseline, which assumes the nation goes over the so-called “fiscal cliff,” does not show a return to potential GDP until 2018. However, as the Economic Policy Institute noted yesterday, CBO’s predictions over the last three years have repeatedly pushed back the date of the recovery, suggesting there’s no guarantee it actually happens...

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