June 04, 2012
It told readers that:
“The [recent economic] developments are casting a shadow over the Obama campaign’s hopes that the president will have the wind of a robust economic recovery at his back for his re-election run.”
If President Obama’s campaign ever had hopes that he would have the “wind of a robust economic recovery at his back” then they are seriously delusional. The best quarter of growth in the last year and a half was just 3.0 percent. According to the Congressional Budget Office, the economy is operating at about 6 percent below its potential.
The growth rate of potential GDP is roughly 2.5 percent annually. This means that if the economy sustained a 3.0 percent growth rate, then it would make up the gap between potential output and actual output at the rate of 0.5 percent a year. At this pace it would reach potential GDP in 12 years, or 2024.
That can hardly be called a “robust economic recovery.” The growth rate following prior severe recessions ran as high as 7-8 percent. That would be a robust economic recovery.
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