Second quarter GDP numbers have once again summoned Mighty Krugthulhu from the depths, beard tentacles of sanity clutching charts for all to behold. How’d we do?
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.5 percent in the second quarter of 2012, (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.0 percent.
Better than having our faces kicked in, I guess. Kroog comes along with his comprehensible glare and injects reason into your mind.
Here’s a chart. It shows changes since the second quarter of 2009, which was both the bottom of the recession and the earliest point at which you can plausibly say that Obama had any influence on actual policy. I show nonresidential fixed investment — basically business investment — and government purchases of goods and services:
Business investment has actually gone up a lot; maybe you think it should have gone up even more, but it’s not the heart of the problem. On the other hand, we’ve had a lot of cutbacks in government — mainly at the state and local level, but federal aid could have avoided that.
This isn’t a picture of an economy hobbled by Big Government; it’s a picture of an economy hobbled by premature austerity.
Like I keep saying, the economy is pretty much doing what the Republicans say the economy should be doing, that is cut government spending (down $120 billion or so) and let the private sector do its invisible hand thing (up about twice that). The result: exactly what you would expect, a mehburger GDP report because we’re, you know, wiping out a whole bunch of private sector economic activity stimulus by wrecking government spending. This is the stated GOP plan in action right now as we speak, and gosh it kind of sucks.
You think we would then ramp up government spending, but Republicans are all insane and need to have anvils dropped on them.