Since when is 6.5 percent unemployment two years from now a tolerable target?
July 20, 2013 - 12:28 am
Five years into the POR (Pelosi-Obama-Reid) economy, our government’s lowered expectations, eagerly embraced and endorsed by its media apparatchiks, are arguably more offensive, intolerable, and damaging than the failed government policies which have kept it in effect.
Those policies, best understood as the final proof of Keynesianism’s collapse, have begotten awful results. Supposedly designed to generate robust economic growth coming out of the recession, they have instead led to the weakest post-downturn growth since World War II, with trillions of dollars in collateral damage.
Three decades ago, during the first four years after the economy emerged from an awful recession while facing a far worse economic landscape — 13 percent inflation, 20 percent-plus prime interest rates, and almost 11 percent unemployment — the economy grew by over 21 percent in real terms. Assuming it ekes out the 1.7 percent annualized growth analysts predict during this year’s second quarter, the POR economy’s four-year post-recession growth will only be 8.5 percent. If the economy would have replicated its Reagan-era performance during the past four years, growth in Gross Domestic Product (GDP) would have been 2-1/2 times greater. That breathtaking difference works out to over $6,000 per person in today’s dollars, or over $24,000 for a family of four:
This leads to a point which can’t be repeated enough: The recession as defined by Obama cheerleader Warren Buffett in 2010 still hasn’t ended. Buffett’s benchmark, which explains why the average American correctly feels that the recession is still here: “I think we’re in a recession until real per capita GDP gets back up to where it was before.”
If we’re lucky, real per capita GDP might get back to where it was in calendar 2007 this year. Under Reagan, per capita GDP fully recovered within one year of the recession’s end, and was 13 percent higher than its pre-recession peak by Year 4.
As demonstrated last week, the recession’s onset can be traced to early June 2008, the point at which it became clear that Barack Obama, armed with an “energy-starving, heavy-taxing, wealth-redistributing, business-hostile agenda,” would become the Democratic Party’s presidential nominee and that campaign’s favorite to win in November. Enough businesspeople, entrepreneurs, and investors to make a difference cancelled any plans they might have had for expansion and additional hiring, and in many cases scaled back their operations in an attempt to survive the coming storm.