Economy went from free-fall to stagnation

Posted by Al Lewis on February 14, 2013
Economy

Oh, how far we have not come since the start of the Great Recession.

The Economic Policy Institute lays it all out in a new report it released today: “From free-fall to stagnation: Five years after the start of the Great Recession, extraordinary policy measures are still needed, but are not forthcoming.”

Ongoing weakness in the economy boils down almost entirely to a lack of demand, the report says.

Some other key findings from the report:

* As of December 2012, 9.1 million jobs needed to be created to get back to where we were before the recession.

* National output was roughly $1 trillion below what it could have been if the economy were at full employment

* The big jump in federal budget deficits beginning in 2008 is a symptom of the weak economy, and has supported a return to economic growth.

* Too many near- and medium-term economic forecasts assume a return to full employment relatively quickly.

* The U.S. economy is projected to remain depressed, with GDP between $941 billion and over $1.0 trillion below full employment output at the end of 2013.

* Five years after the Great Recession began, “full economic recovery still remains years and years away.”

Click here to read EPI’s full report.