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 1.3 percent in the second quarter of 2011, (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 0.4 percent.We needed GDP of about 2.5 percent to start lowering unemployment. Doesn't look as if that's going to happen any time soon. The peerless Dean Baker explains:
The overall picture in this report is of an economy that is stagnating now that the boost from the stimulus is over. This should not be surprising to economists. There is no source of demand to replace the lost construction resulting from the end of the housing boom, coupled with the plunge in consumption due to the loss of more than $6 trillion in housing bubble wealth.How to get the economy back on track? Here's an idea: start making things. Here, in America.
Writes Alan Tonelson,
The message to the President and Congress, and Republicans, Democrats, and Tea Partyers alike couldn’t be clearer: America’s damaged economy will never be healed unless recovery programs emphasize slashing the nation’s still-massive and chronic trade deficits. Greatly narrowing the gap between exports and imports represents the only realistic way to foster growth without artificially boosting anemic domestic demand further – whether through more government spending or more tax cuts.In other words, curb imports. And do not -- repeat do NOT -- approve the job-killing Colombia, Panama and South Korea trade deals.