Makin: U.S. Economy Will Stay Weak Through 2010
John H. Makin, visiting scholar at AEI, writes about the challenges still facing the U.S. economy:
Nearly two years of zero percent interest rates, a $1.2 trillion expansion of the Federal Reserve's balance sheet, and a nearly $800 billion fiscal stimulus package in February 2009 have failed to produce sustainable growth. The newly released gross domestic product data, including first estimates of second-quarter growth and revisions of past data, carry two disappointing messages. First, growth of demand--final sales of goods and services, a necessary condition for sustainable employment growth--is very weak and set to weaken further. And second, demand growth over the past year has been overestimated.
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