More Evidence of Failure

According to some Economists, the recession ended in June of last year, before the “stimulus” money started hitting the economy.

So why no recovery?  The article points out one big reason:  Uncertainty.

How slow? The Organization for Economic Cooperation and Development figures the U.S. economy will grow 2.6 percent this year. It would take growth twice that fast to drive down unemployment by a single percentage point.

Unemployment usually keeps rising well after a recession ends. That’s because it takes time for companies to gain confidence in the economy, know that customer demand will last, and add jobs.

But for the past few recessions, it’s taken longer and longer for unemployment to come down. In 1982, for example, unemployment peaked the same month the recession ended. After the 2001 recession, the gap was 19 months.

This time around, it’s been 15 months, and economists don’t expect unemployment to come down significantly anytime soon.

Companies are always a little uncertain coming out of a recession.  Coming out of this one, much like coming out of the recession in the early 30’s that became the Great Depression, government has created additional uncertainty.  That will prolong the recovery at a minimum, and might send us back in to another recession.

And the administration and Congress can only think that expanding the role of government and making things even more uncertain is the only answer.

It didn’t work in the 30’s, and it won’t work this time.  What will work is eliminating the uncertainty so businesses are confident they can grow again without unexpected government intervention and increased costs.

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About Paul Stagg

Husband, lifter, MBA in Baltimore, MD. Will post about Powerlifting, politics, Classical Liberalism, Economics, building wealth, self improvement, productivity, heavy music, wine, food, beer, and almost anything else. View all posts by Paul Stagg

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