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This Graph Should Scare You
Washington Post WonkBlog ^ | November 18, 2012 | Staff

Posted on 11/18/2012 2:18:34 PM PST by lbryce

A new study from the Congressional Budget Office starts with the scariest graph you’ll see today.


Source: Congressional Budget Office

In other words, you’re not imagining it: This economic recovery has been a big disappointment relative to what the United States has usually experienced after a recession. Growth has been 9 percent below what was seen in past recoveries on average in its first three years. The CBO report tries to disentangle where that underperformance is coming from and its answer is deeply unsettling: The U.S. economy just isn’t as good at growing as it used to be.

The new CBO report claims that two-thirds of the underperformance of the economy over the past three years compared to a typical recovery is due to a slower rate of growth in potential GDP. Only one-third, in this analysis, is due to factors related to this recession.

Potential GDP is the measure of what the economy is capable of producing if almost all of the people who want jobs are able to get one and almost all its machines and buildings were humming at their potential. While it has grown consistently through modern U.S. history (we can thank a growing population and steadily improving technology for that), it doesn’t always grow at the same rate. In periods when baby boomers were reaching their working years and women were entering the workforce in large numbers, the rate at which potential GDP rose was very high, over 4 percent at times, by the CBO’s reckoning.

In recent years, though, those trends have reversed. Baby boomers are starting to retire and the proportion of women who work has leveled off.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Extended News; Government; News/Current Events
KEYWORDS: obama; obamageddon; obamalaise; obamanomics; obamasized; obamasizing; ownit
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And Zero is quite pleased with himself today as only the very beginning of things to come.
1 posted on 11/18/2012 2:18:41 PM PST by lbryce
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To: lbryce

Egggsactly! His mentors..Cloward and Piven are justifiably PROUD of their Marxist protege’.


2 posted on 11/18/2012 2:21:49 PM PST by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: lbryce

>>This economic recovery has been a big disappointment

What economic recovery? I have more unemployed friends now that ever. I know more underemployed people than I’ve ever known. Prices are up. Wages are stagnant at best, but lower for many. Even my 401k has not even made up the losses of the last 4 years.

Where is the recovery that I keep hearing about, or is all just statistical smoke and mirrors?


3 posted on 11/18/2012 2:23:05 PM PST by Bryanw92 (Sic semper tyrannis)
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To: lbryce

There won’t be enough left of the USA, economically, in 2016 for conservatives to salvage.

There are fiscal realities and they don’t paint a pretty picture.

And yeah, it’s scary in various ways.


4 posted on 11/18/2012 2:24:20 PM PST by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: lbryce

The ice cream vendor - Zero - is preparing to give out more ice cream with “taxes on the rich” and the free ice cream will attract more voters. What scares me is the current underground move to abolish the 22 Amendment. The Petraeus sex scandal is what the right hand is doing. What’s the left hand up to?


5 posted on 11/18/2012 2:25:15 PM PST by Dapper 26
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To: Don Corleone
No no no ..

It's all because Republicans stayed home from the stores

(VERY pissed off at other threads (and FreepeRs) that say the election is all because Republicans stayed home)

6 posted on 11/18/2012 2:25:55 PM PST by knarf (I say things that are true ... I have no proof ... but they're true)
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To: lbryce

Must be because of racism!/s


7 posted on 11/18/2012 2:31:35 PM PST by Dallas59 (President Robert Gibbs 2009-2011)
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To: lbryce

The difference is that previously they guy in the oval office supported recovery. This time, 0bama is working to prevent recovery.


8 posted on 11/18/2012 2:32:27 PM PST by 21st Century Crusader (August 26, 1191)
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To: lbryce

Taxation and regulation......the primary industry in DC....has prevailed.


9 posted on 11/18/2012 2:33:13 PM PST by mo (If you understand, no explanation is needed. If you don't understand, no explanation is possible.)
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To: knarf

you didn’t stay home did you?


10 posted on 11/18/2012 2:34:15 PM PST by plain talk
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To: lbryce

Washington Post: It appears that the Emperor may not be wearing much in the way of clothing.

Well, what took y’all so long to deduce this?


11 posted on 11/18/2012 2:40:05 PM PST by Army Air Corps (Four Fried Chickens and a Coke)
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To: lbryce

We see the disincentives all around us these days for hard work, playing by the rules, being innovative, etc. Do these things and you’ll be punished for your efforts by the state, and demonized if you actually overcome the ever rising levels of taxation and regulation and somehow succeed. Being a parasite is where it’s at these days - not a host. There’s no fun in that, especially with Obamaclaus and the demo-elves in power.


12 posted on 11/18/2012 2:40:11 PM PST by MCH
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To: lbryce

And we all know that the government inflation numbers are completely bogus and wildly under report the true inflation numbers so drop the slope of that line by about 50% if you want a more realistic representation of the “recovery rate”.


13 posted on 11/18/2012 2:40:19 PM PST by RatSlayer
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To: lbryce; All

I’ve read the CBO report and I highly recommend that Freepers go read it.

The CBO makes a bunch of observations, but falls short of making a diagnosis because to do so is socially inconvenient and embarrassing in DC, where the received “conventional wisdom” chants ideas that we need more “free trade” to export more of our actual wealth creation while importing more unemployment through immigration of low/no skill immigrants, 56% of whom are on public assistance within a year.

But, as they say about booze-hounds and dopers, the first step in recovery is recognizing that you have a problem, and this CBO report is a first step on the first step of 12, right?


14 posted on 11/18/2012 2:41:24 PM PST by NVDave
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To: lbryce
I think Calculated Risk puts out a better one:


15 posted on 11/18/2012 2:42:00 PM PST by Theoria (Romney is a Pyrrhic victory.)
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To: Dapper 26

Dapper, so glad to have an alternative analogy to Santa. Can we forward to Rush, just as a suggestion. Am begging him to drop Santa, a caricature of a true person in history, St. Nicholas, who did tons for children without taking anything and who has a list of the undeserving (and uses it- from my experience).

Ugh, Comparing Hussein to him.


16 posted on 11/18/2012 2:42:32 PM PST by stanne
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To: lbryce
God Damn America.

Apparently he has.

17 posted on 11/18/2012 2:43:00 PM PST by rawcatslyentist ("Behold, I am against you, O arrogant one," Jeremiah 50:31)
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To: F15Eagle

That’s pretty much where I’m coming down, and too many Republicans don’t want to admit it. Especially the clowns in DC.

But, numbers don’t lie, and unlike economists, engineers don’t let numbers lie and we don’t make simplifying assumptions... if engineers did their math the way economists did, you’d see engineering papers start out like this:

“Assume there’s no friction or gravity...”


18 posted on 11/18/2012 2:43:26 PM PST by NVDave
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To: Theoria

The most interesting thing about that graph (which I’ve seen many times before) is to take notice of how the shape of the recovery curves has changed since a) we’ve gone to a completely fiat currency, which b) has allowed the Fed to have complete control over monetary policy. As we can see, the post ‘73 recessions have much more “rounded” recovery curves, and every recession has required longer and longer periods of time to recover from, albeit with less sharp declines in unemployment.

This has resulted in the bottom, 2007, curve, which shows that the ability of the economy to purge itself of mis-allocation of capital has now been so impeded that it cannot recover and employment is taking forever to recover.


19 posted on 11/18/2012 2:47:57 PM PST by NVDave
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To: lbryce

There has been no “recovery”. Even back when the economy was supposedly “good”, it wasn’t as we were busily off-shoring jobs and building up debt on top of debt, while expanding government handouts. It was all a sham.

Now we simply have a house of cards that they are trying to keep from falling.


20 posted on 11/18/2012 2:51:48 PM PST by KoRn (Department of Homeland Security, Certified - "Right Wing Extremist")
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To: stanne

I dislike that analogy too. I prefer to think of Øbongo as the stereotypical drug dealer - handing out “free” samples to get you hooked and then robbing you of your very soul.


21 posted on 11/18/2012 2:52:11 PM PST by rockrr (Everything is different now...)
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To: lbryce

The only thing about the CBO article with which I take issue is the assertion that weak consumer spending — less GDP wealth going to labor — is predominantly responsible.

Economies don’t grow because of increased consumer spending by labor; on the contrary, an increase in consumer spending by labor is a *result* of a growing economy. What grows an economy is an increase in private-sector investment leading to 1) an increase in private-sector jobs, and 2) an increase in private-sector productivity.

The increase in productivity leads to lower prices for goods and services, which, in turn, leads to the increase in consumer spending.

The CBO article at least was honest enough to mention that “uncertainty” appears to be playing a part in the current economic stagnation. It didn’t mention, however, that the main source of this uncertainty is the upcoming crop of new taxes and regulations implemented by the Hussein Obama administration.


22 posted on 11/18/2012 2:52:48 PM PST by GoodDay
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To: lbryce

Actually it is much worse than that..
The CBO has always been delusional.. totally political..
unless they were outright lieing right to your face..


23 posted on 11/18/2012 2:53:00 PM PST by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
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To: NVDave
c) Globalization - Seems global wage and labor arbitrage is really greating a slowing in domestic recovery. That of course and domestic policies.
24 posted on 11/18/2012 2:53:14 PM PST by Theoria (Romney is a Pyrrhic victory.)
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To: FReepers; Patriots; FRiends
By Lady Jag!





Patriots for FRee Republic



25 posted on 11/18/2012 2:54:22 PM PST by onyx (FREE REPUBLIC IS HERE TO STAY! DONATE MONTHLY! IF YOU WANT ON SARAH PALIN''S PING LIST, LET ME KNOW)
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To: lbryce

There has been no “recovery”. Even back when the economy was supposedly “good”, it wasn’t as we were busily off-shoring jobs and building up debt on top of debt, while expanding government handouts. It was all a sham.

Now we simply have a house of cards that they are trying to keep from falling.


26 posted on 11/18/2012 2:54:24 PM PST by KoRn (Department of Homeland Security, Certified - "Right Wing Extremist")
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To: knarf

“(VERY pissed off at other threads (and FreepeRs) that say the election is all because Republicans stayed home) “

You cannot say that voters staying home wasn’t part of the issue. Sorry but the number’s don’t lie.


27 posted on 11/18/2012 2:55:09 PM PST by CodeToad (Liberals are bloodsucking ticks. We need to light the matchstick to burn them off.)
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To: lbryce

wait... the left has been trying to tell us that this has been an awesome and fantastic recovery


28 posted on 11/18/2012 2:55:48 PM PST by GeronL (http://asspos.blogspot.com)
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To: rockrr

Nothing against Rush, at all. He is on to something. I like your analogy.


29 posted on 11/18/2012 2:56:12 PM PST by stanne
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To: NVDave

Yep, I engineered software systems. The difference between fantasy and reality was something I had to hammer home over and over to customers and management.

Including a gov’t agency (not secret, but unnamed) where the managers insisted I deploy a software system before it was completely written, integrated, tested, etc. I refused. And I stood alone.


30 posted on 11/18/2012 2:56:12 PM PST by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: Theoria

If you look at the last four, seems to be a downward trend, greatly exacerbated in the current one.

Great Society, anyone?


31 posted on 11/18/2012 3:01:58 PM PST by P.O.E. (Pray for America)
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To: lbryce

Ok, there are structural reasons why the economy isn’t recovering as fast as in the past. I will accept that. Major demographic changes are apparent. However, I see this article as more cover for Obama. It really isn’t his fault. There are structural reasons for the anemic recovery. The same could have been said for Bush but they (the left, MSM) still blame him for most of the problems we have today. The truth is, for a variety of reasons, we have more people taking out of the system than are putting into it. Nothing will change until this change is forced onto us. That change will happen pretty soon and the pain will be severe. The majority of voters who showed up this time don’t care about any of this. They just wanted a cool man of color to beat the evil rich white guy. I am sick of all the rationalizations on both sides. That is the unvarnished truth. Mitt Romney was the most milk toast moderate squishy sort of Republican and the left still demonized him and voted their tribal leanings. Pain is coming to all of us. Obama, being culturally attuned and cool, will do nothing to prevent that result.


32 posted on 11/18/2012 3:05:38 PM PST by 3Fingas
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To: knarf

Thank WTO, Free Trade and Illegal Immigration (lack of enforcement under Bush 41 thru GWB). Corporate America made their short term record profits, problem is how do you rapidly recover after hurting youself with overleveraging, investing in AAA investments that were actually junk, etc etc etc. In the past we had a cushion, but now thanks to corporate America China has closed the tech gap (courtesy of American corporate tech transfers) with cheap labor. As the economy slowsdown, corporate America will try to extend prosperity by off shoring jobs till it no longer prevents the downturn. Add Obama taxes and regs the economical structured hole is even deeper.


33 posted on 11/18/2012 3:07:28 PM PST by Fee
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To: lbryce

.. (snort!) Bush’s fault! . . . Not Obama’s, nor is it Nazi Pelosi’s, nor is it Harry Reid’s . . . they’ve had six years to “fix” it . . and “fix” it they have! Just wait ‘til they “fix” it four more years . . . still blaming “Bush” and the “uncooperative” Repubicans.


34 posted on 11/18/2012 3:13:06 PM PST by Twinkie (Do unto others as you would have them do unto you.)
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To: Dapper 26

Government confiscation of IRA’s/401k’s coming soon..


35 posted on 11/18/2012 3:17:07 PM PST by GeorgeWashingtonsGhost
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To: lbryce

36 posted on 11/18/2012 3:17:42 PM PST by EEGator
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To: lbryce

After ts al sadi and done we will have wasted 8 years og the avg lifespan 78.

Can we sue the DNC for 10% of our lives value?


37 posted on 11/18/2012 3:20:22 PM PST by NoLibZone (Secession nation(s) will be free of history tied to slavery.)
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To: lbryce

After it’s all said and done we will have wasted 8 years of the avg life span 78.

Can we sue the DNC for 10% of our lives value?


38 posted on 11/18/2012 3:21:18 PM PST by NoLibZone (Secession nation(s) will be free of history tied to slavery.)
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To: knarf

“(VERY pissed off at other threads (and FreepeRs) that say the election is all because Republicans stayed home)”


Simple arithmetic. The guy who gets the most votes wins.... and the other guy loses. So yes, those that didn’t bother to vote for “love of country” gave it to Obama.

Now, each have their own reason for not bothering to vote in this most critical of elections, fair enough.

If you are one of the ones that stayed home, don’t be “pissed”, be proud.... because you got exactly want you wanted and you’re going to get what you deserve.

Now, if you ran out of gas on your way to the polls, that’s something else, but I think folks should do their best to work off of the top of the gas tank, not the bottom.


39 posted on 11/18/2012 3:23:12 PM PST by Gator113 (WHO gave the order to NOT rescue our men in Benghazi?)
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To: lbryce

Since this information is MONTHs late WHO cares what the Compost reports.


40 posted on 11/18/2012 3:27:33 PM PST by DanZ
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To: 3Fingas

Milk Toast> Milquetoast


41 posted on 11/18/2012 3:34:10 PM PST by lbryce (BHO:"Now, I am become Death, the destroyer of worlds by way Oppenheiner at Trinity NM)
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To: F15Eagle

FDR’s Treasury secretary Henry Morganthau in May 1939:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!”


42 posted on 11/18/2012 3:57:57 PM PST by TurboZamboni (Looting the future to bribe the present)
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To: Bryanw92
Even my 401k has not even made up the losses of the last 4 years.

That's why I call mine a 201K.

43 posted on 11/18/2012 4:00:02 PM PST by jda ("Righteousness exalts a nation . . .")
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To: jda

LOL. That just about sums it up!


44 posted on 11/18/2012 4:04:32 PM PST by Bryanw92 (Sic semper tyrannis)
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To: NoLibZone
Can we sue the DNC for 10% of our lives value?

The best that can be done is settle out of court; the DNC will agree to taking 10% of the end out of life instead.

45 posted on 11/18/2012 4:12:23 PM PST by C210N ("ask not what the candidate can do for you, ask what you can do for the candidate" (Breitbart, 2012))
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To: lbryce

I was referring to the breakfast food :-D


46 posted on 11/18/2012 4:19:00 PM PST by 3Fingas
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To: Gator113
No, I voted for Romney.

Not my first or any choice ... but he was what I had and I'll be damned (and I guess I and we will be) if I'll vote for a mulatto, bastard usurper.

47 posted on 11/18/2012 5:02:51 PM PST by knarf (I say things that are true ... I have no proof ... but they're true)
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To: plain talk
No, of course not.

Interesting that my reply seems to indicate I was a stay at home voter

/8^)

48 posted on 11/18/2012 5:04:59 PM PST by knarf (I say things that are true ... I have no proof ... but they're true)
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To: F15Eagle

I heard lots of folks like Hannity and Rove saying we won’t survive four more years. I’m afraid they were right.


49 posted on 11/18/2012 5:20:38 PM PST by Terry Mross (I haven't watched the news since the election. Someone ping me if anything big happens.)
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To: lbryce
When the financial crisis started, Peter Schiff said that bailing out the banks would give us a Japan-like economy for a whole decade.

He was right.

The government should have let the losers who got us into this mess, fail and/or go to jail.

The economic system would have cleared itself of counter-productive businesses, and we would have long since recovered by now.

50 posted on 11/18/2012 5:23:26 PM PST by Age of Reason
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