Krugman Blog- The GOP Tax
October 15, 2013,
The GOP Tax
Macroeconomic Advisers has a new report out about the effects of bad fiscal policy since 2010 that is, since the GOP takeover of the House. The way its written, however, might confuse some people. They say that combined effects of uncertainty in the bond market and cuts in discretionary spending have subtracted 1% from GDP growth. Thats not 1% off GDP its the annualized rate of growth, so that were talking about almost 3% of GDP at this point; cumulatively, the losses come to around $700 billion of wasted economic potential. This is in the same ballpark as my own estimates.
And they also estimate that the current unemployment rate is 1.4 points higher than it would have been without those policies (a number consistent with almost 3% lower GDP); so, wed have unemployment below 6% if not for these people.
Great work all around, guys.
http://krugman.blogs.nytimes.com/2013/10/15/the-gop-tax/