The economy: even sicker than we thought

Brad DeLong puts yesterday’s GDP numbers in perspective:

In the first six months of 2011 real GDP grew at an annual rate of only 0.8% per year. At that growth rate, unemployment will rise at about 1 percentage point per year.

I need to see the guts of the numbers, but unless there is something very odd in them, the chance that the unemployment rate will be above 9% in November 2012 just crossed 50% heading upward.

A rational Federal Reserve would:

      • Begin QE III today.

A rational administration would:

      • Announce a technical fix to the debt ceiling today: the economy does not need the risk.
      • Abandon all long-term budget negotiations with anybody who requires cuts to the deficit over the next eighteen months to come to the table: the economy needs stimulus, not contra[c]tion.
      • Take every single uncommitted TARP and TALF and whatever dollar, leverage it up, and throw it at the economy to boost aggregate demand.
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About Guy N. Texas

Guy N. Texas is the pen name of a lawyer living in Dallas, who is now a liberal. He was once conservative, but this word has so morphed in meaning that he can no longer call himself that in good conscience. Guy has no political aspirations. He speaks only for himself.
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