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PeakTrader said...

U.S. per capita real GDP is still below the 2007 peak.

This weak recovery has been very expensive, which we'll all pay for, one way or another.

The federal government still has one foot on the accelerator and the other foot on the brake.

A huge amount of government stimulus (fiscal and monetary) has been wasted.

This train wreck could've been completely avoided.

There are so many inefficiencies in tax collecting, income redistributing, and strangulating regulations that it's a wonder the U.S. creates any net wealth.

However, over the past four years, no net wealth has been created, even with historic expansionary fiscal policy and quantitative easing.

According to Paul Krugman, if we had a V-shaped recovery like the Reagan recovery, the country would've had $2.9 trillion of additional output by the end of 2011.

Instead, the federal government is spending $1.1 trillion a year more than in 2007 to maintain living standards.

Both consumption and investment are in sub-par recoveries, because GDP (income = output) is also in a sub-par recovery.

New regulations created new risks and costs, while lending remains too tight for most households and small businesses.

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Small businesses mildly hopeful on Obama jobs plan
September 9, 2011

Small businesses are normally the leading drivers of job growth. They created 65 percent of net private-sector jobs in the past decade, according to the Small Business Administration.

Newer businesses are even more crucial. Companies less than 5 years old accounted for all the net job gains from 1980 to 2005, according to the Kauffman Foundation, which studies entrepreneurship.

But small businesses have been slower than larger companies to recover since the recession officially ended in June 2009. Surveys show they're still struggling with poor sales. By contrast, larger corporations have been exporting more, earning more revenue overseas and stockpiling cash.

"You're not going to hire someone unless you have a need for that person," Schumann said.

"We're going to hire based on consumer demand, and until demand picks up, I'm not going to be hiring based on a tax credit," said David Hauck.

"We need to get consumers and businesses spending money," Schumann said. "The jobs will follow."

Robert Litan, a vice president at the Kauffman Foundation, said the tax cuts would likely lead some small businesses that were hesitant about hiring to add jobs. But most will want to see sales improve first.

"If consumers are still in a funk and aren't buying anything, I don't think the tax cuts are going to make a difference," Litan said.