Why is the recovery taking so long (1 Viewer)

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With the election coming up, congress polling so low, and the groundswell around Bernie's campaign it would seem that many are already at this conclusion even if not by direct analysis but by gut feel.

Conclusion

The recovery since 2009 has been historically slow, and the disappointing pace can be explained entirely by the fiscal austerity imposed by Republicans in Congress.

Of course, other national policymakers are not completely blameless. While the Federal Reserve pushed beyond the bounds of conventional monetary policy to fight the recession and aid recovery, there are reasons to think that it could have done more. The Obama administration issued several calls for more expansionary fiscal policy (like the American Jobs Act of 2010), but it had no unilateral power to pass more expansionary policy. Yet it could have made a louder and more consistent case that the slow recovery had concrete, identifiable roots in decisions made by Congress. Had the Obama administration made such a powerful case for why austerity was hampering growth, it could have educated the public and potentially helped build support for more sensible policy the next time the United States faces a recession.

But these caveats about the Fed and the Obama administration are mostly quibbling. By far the biggest drag on growth throughout the recovery from the Great Recession has been the fiscal policy forced upon us by Republican lawmakers in Congress and austerity-minded state legislatures and governors.
Why is recovery taking so long
 

saintmdterps

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Galbreath34

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At the nation level austerity has pretty much been thoroughly debunked as a way to grow and maintain an economy, especially a week one. A few years ago that kid blew up the economic world with a thorough proof that austerity caused more damage in the EU than it fixed.
 

Saint by the Bay

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There's a lot of reasons but a big one is that the global economy is stagnant. The only two major economies that have grown in the last 8 years are us and China. We have both seen fairly substantial growth but every other major economy in the world is either frozen or has shrunk in the last 8 years. I posted the chart on another thread.

We are out performing the rest of the world but I don't think it can be expected for us to be full octane if the rest of the world is running on discount Kroger gasoline they bought with their .10 per gallon Kroger points discount.
 

JimEverett

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At the nation level austerity has pretty much been thoroughly debunked as a way to grow and maintain an economy, especially a week one. A few years ago that kid blew up the economic world with a thorough proof that austerity caused more damage in the EU than it fixed.
I am still waiting for all that explosive, debilitating inflation that conservatives have been predicting for the last 7 years. LMAO
 

Dre

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With the election coming up, congress polling so low, and the groundswell around Bernie's campaign it would seem that many are already at this conclusion even if not by direct analysis but by gut feel.



Why is recovery taking so long
Just to save everyone else the work, the chairman of the EPI is the president of the AFL-CIO.
 

Yoweigh

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In 2009, Congress approved a $787B dollar stimulus package. However, in that same year, the economy contracted 2.9%.
Feel free to ignore the parts that don't agree with your preconceived notions.

the CBO projected the economy would contract 3% for 2009. That's because it had already contracted 5.4% the first quarter, and 0.5% in the second. The Dow had fallen to 6,594.44 on March 5, 2009. By Q4 2009, GDP was up 3.9% and the Dow had risen to 10,428. By 2010, the economy expanded 2.5%.
So the stimulus package actually recovered 2.9 percentage points, from 5.9% before it was enacted.
 

Gore

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There's a lot of reasons but a big one is that the global economy is stagnant. The only two major economies that have grown in the last 8 years are us and China. We have both seen fairly substantial growth but every other major economy in the world is either frozen or has shrunk in the last 8 years. I posted the chart on another thread..
How about Germany? The economy has been growing every year too, unemployment has been going down and the german government is doing that without taking on new debts since 2014.
 

saintmdterps

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What's worrisome is the recovery has been historically slow despite near zero interest rates.
Because banks aren't lending the money on which they pay .25%, they're taking that money and speculating in the oil and commodities markets which in turn leads to much of the volatility we're seen in those markets.

Banks speculate on raw materials and food
 

WhoDatPhan78

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Saint by the Bay

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How about Germany? The economy has been growing every year too, unemployment has been going down and the german government is doing that without taking on new debts since 2014.
Germany's GDP in 2008 was 3.8 trillion, their GDP in 2015 was 3.4 trillion. They are doing great on trade and unemployment but their economy is still not really growing. It's not bad, but it is stagnant. I do think the actions the are taking now will greatly benefit them when the global economy starts moving again.

World's largest economies - CNNMoney
 

SaintStephen

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I still want to know what's been done to reign in derivatives and CDS's? When they make up 100's of %'s of nations' GDPs, something should have been done about it. It's this fiat growth that has established the .1% as the harvesters of what the rest of us spend our lives' sowing. And the best part is: That same elite controls the entire system through private central banks. But The Fed and IMF cares about the general populace...roflwsmh


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SaintStephen

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And who funds the EPI? Surprise, surprise! Ford Foundation, Rockefeller Brothers, and the other usual suspects that steer policy from behind the scenes in their board chairs of "think tanks". The same types of organizations and lobbies that the first super rich robber barons set up at the turn of the 20th century to keep themselves rich and the population under control. I'm sure that's all a conspiracy theory though, and there is no link between these foundations and the PRIVATE central bank that they refuse to criticize.


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Boondock

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I still want to know what's been done to reign in derivatives and CDS's? When they make up 100's of %'s of nations' GDPs, something should have been done about it. It's this fiat growth that has established the .1% as the harvesters of what the rest of us spend our lives' sowing. And the best part is: That same elite controls the entire system through private central banks. But The Fed and IMF cares about the general populace...roflwsmh


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I completely agree with you. Besides Dodd-Frank nothing has been done. I think its time for a 21st century version of the Glass-Stegall Act. Which, ironically enough, was repealed by one William Jefferson Clinton in 1999.

Repeal of Glass-Steagall Caused the Financial Crisis | US News Opinion

Don't get me started on FIAT currency! The entire world economic system is literally based on a house of cards (i.e. paper & digital monies) that can be devalued and/or exchanged with the push of a button. Not only that, but hundreds of thousands of these transactions are made every day, making it nearly impossible to track.

Matter of fact, China devalues there currency almost on a quarterly basis for economic and trade advantages.
 

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