Why is recovery taking so long—and who’s to blame?

[yallerdawg]

Blame austerity, not Obama, for slow economic recovery! HuffPo

Source: Economic Policy Institute, by Josh Bivens

Introduction and key findings

This fall’s presidential campaign will offer conflicting narratives about how the U.S. economy is faring and how well incumbent policymakers have managed the recovery from the Great Recession. But we already know the story. We are enduring one of the slowest economic recoveries in recent history, and the pace can be entirely explained by the fiscal austerity, particularly with regard to spending, imposed by Republican policymakers, members of Congress primarily but also legislators and governors at the state level. Key findings of this brief are:

- Since the recovery’s trough in June 2009, employment took longer (51 months) to reach its pre-recession peak than in any other of the previous three recoveries. Much of this too-slow march back to the pre-recession employment peak can be attributed to the length and severity of the Great Recession itself—the economy had a much larger hole to dig out of. But the pace of job growth in the recovery phase following the recession was also slow relative to previous recoveries—slower than any on record except the recovery in the early 2000s. At the trough of the Great Recession the economy was more damaged than at the trough of any postwar business cycle; only the 1982 trough was comparable.

- The ability of conventional monetary policy to spur recovery following the Great Recession was more limited than in any other postwar recovery.

- Given the degree of damage inflicted by the Great Recession and the restricted ability of monetary policy to aid recovery, historically expansionary fiscal policy was required to return the U.S. economy to full health. But this government spending not only failed to rise fast enough to spur a rapid recovery, it outright contracted, and this policy choice fully explains why the economy is only partially recovered from the Great Recession a full seven years after its official end.

Read it all at: http://www.epi.org/publication/why-is-recovery-taking-so-long-and-who-is-to-blame/