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Krugman – The Hobbled Recovery

Via: NYT

New GDP report out today; slightly stronger than expected, but still very weak. So what’s holding back recovery?

You know what the usual suspects are saying: big government! Bad Obama! Insulting businessmen!

Here’s a chart (See Above). 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.

http://krugman.blogs.nytimes.com/2012/07/27/the-hobbled-recovery/?gwh=B8718A8F78E3AE182D02742E1856530A

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“The single most important thing we want to achieve is for President Obama to be a one-term president.”

~Mitch McConnell, Senate Minority Leader, (R-Ky.), October 2010

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July 28, 2012 - Posted by | 2012, GOP morons | , , ,

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