Posted on 04/21/2013 11:42:00 AM PDT by whitedog57
One of the measures I like to follow is the spread between real GDP growth and potential real GDP growth. Potential GDP is the highest level of real Gross Domestic Product output that can be sustained over the long term.
As of the end of 2012, the output gap (potential – actual real GDP growth) logged in at $840 billion. And that is just for Q4 2012.
Notice that the US has been running almost a trillion dollars in subpar performance per quarter since 2009.
Nobel Laureate Robert Lucas from University of Chicago gave a lecture in 2011 where he discussed the recent recession and the decline in output. As you can you, US output since 2009 has been far below the long-run average.
Lucas observed that European economies have larger government role and 20-30% lower income level than the US. I have discussed before the declining wages and salaries (as a percentage of GDP) compared to increased government spending. And declining real household income.
Lucas then asked the following questions:
• Is it possible that by imitating European policies on labor markets, welfare, and taxes U.S. has chosen a new, lower GDP trend?
• If so, it may be that the weak recovery we have had so far is all the recovery we will get
To quote Peggy Lee, “Is That All There Is?“
I agree with Lucas. Government has strangled growth in the US through regulation, taxes and government squandering of money.
My favorite waste of government funds from Coburn’s book of waste is … Heavy drinking in thirties linked with immaturity – (MO) $548,731. We needed a half million dollar study of 30-somethings drinking in bars to link with immaturity??
Stagflation.
Uh Oh, Obamacare Math Sinks In for Small Businesses
http://finance.yahoo.com/news/uh-oh-obamacare-math-sinks-152220158.html
Why ObamaCare May Cost You Your Job
http://www.freerepublic.com/focus/f-news/3010151/posts
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