Today the latest numbers are out on the economy, and the best word to describe it is “lousy.” The Department of Commerce reports that GDP—the measure of the total output of goods and services in the country—only grew by 1.5% over the last three months. The economy isn’t collapsing like it was at the end of 2008, but it’s also not growing quickly enough to help pull us out of the hole that recession put us in.
The reason for it is clear, as one economist tells CNN:
“The outlook is very bleak from a consumer’s perspective,” said Wells Fargo economist Sam Bullard. “We’re seeing such weak job and income growth right now, there’s not a lot to propel consumers forward.”
This isn’t just an abstract statistic to our members. We talk to thousands of people every week, and they don’t need an economist looking at a chart to tell them what’s wrong; they’re living it.
One reason for the weakness is that we’ve lost hundreds of thousands of jobs in education, safety and other public services. That doesn’t just affect people who lose those jobs—it hurts their local businesses and the people they’re now competing against in the job market. As Paul Krugman puts it, this is “an economy hobbled by premature austerity.”
Another reason is that we still have a long way to go to fix the housing crisis. Too many working people are being held back by big payments on underwater mortgages, and foreclosures are still devastating families and neighborhoods.
You’ll hear a lot of people talking today about how the economic sluggishness is due to deficits, or regulation of corporations, or even people not being nice enough to the wealthy. These people, to put it politely, are not entirely respectful of your intelligence. The broad consensus of economists is that this storyline has no connection to reality. Indeed, Romney’s agenda is upside-down from what we need to fix the near-term challenges and could even make things worse:
There’s nothing in these policies which would deal with the immediate economic problem — a significant lack of aggregate demand…you actually have a plan to contract the economy.
So what do we need to do about it? For starters, we should be passing a plan like the American Jobs Act—provisions of which were repeatedly filibustered by Senate Republicans last year. That would have put hundreds of thousands of people back to work in schools, fire stations, police stations and infrastructure projects. We also need to be doing more to keep people in their homes, including by reducing the principal on their mortgages to their homes’ actual value.
These are things we can do—but they’re being actively blocked by members of Congress whose economic theories take place in a fantasy world.