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Here we go again. GDP growth for Q2 of this year has been revised down to 1.3% from 1.7%. Our GDP now stands at $15.585 trillion, while our debt (including intragovernmental liabilities that must be dealt with) is $16.022 trillion. Durable goods orders have dropped 13.2% in August, the largest dip since January 2009. Orders for July were revised down.
Folks, this is not endemic of a recession. It’s worse than that. This is a sickly recovery.
The problem here is not the recession that Obama complains he inherited. We are no longer losing jobs and GDP is no longer contracting. The problem is the recovery. In fact, we began recovering jobs and GDP during the spring of 2009. So yes, the business cycle tends to endure, irrespective of who is in the White House. There was a very deep recession at the end of Bush’s term, and that recession ended in 2009. The same way Obama cannot be blamed for the initial recession in 2008, he cannot take credit for the immediate end of the recession so early in his term.
What is unprecedented and what is Obama’s fault is the ensuing lack of recovery. We have never had a recession in which we did not emerge from it in a stronger position. This recession is analogous to a 1,000-foot ditch. We stopped falling deeper into the hole in June 2009. However, instead of digging out of the hole, we are permanently coasting near the bottom of that trench. Hence, the protracted stagnation is much worse than the abrupt recession. It is this stagnation that Obama owns as a result of his intervention into every sector of the economy. The over 80 million hours of Obamacare rules and regulations that businesses must comply with is just one example of why the economy will never recover.
Take a look at this GDP chart posted by James Pethokoukis at AEI:
As you can see, the hemorrhaging stopped shortly after Obama took office. What has ensued is an unprecedented period of lethargic growth. We’ve never seen such weak growth in all the fundamentals of the economy this late after the recession ended. During the first two quarters of 1984, the economy grew by 8% and 7.1% respectively.
Romney must not let Obama get away with blaming the current economic malaise on the previous administration. Back in 2009, Obama bragged about the end of the recession. If the recession ended in 2009, the unprecedented lack of recovery that we are now incurring is due to his overly regulated crony capitalist economy. It’s the recovery stupid.