Economic Russian Roulette In the American Political System
The Article: Rational Irrationality: G.D.P. Shocker: U.S. on Verge of Double-Dip Recession by John Cassidy of the New Yorker.
The Text: Amid all the absurd posturing over raising the debt ceiling comes some real news—and it’s very bad. According to new government figures, the economy has hardly grown at all in 2011. The recovery that began in early 2009 is now officially stalled. Some economists will quibble, but I think it is fair to say that the dreaded double-dip recession is at hand.
However it is labelled, the economic relapse is sure to have a big impact on politics. In the immediate term, it will increase pressure on Congress to raise the debt ceiling so the U.S. government can move on to more important issues, such as creating jobs. There is now the alarming prospect of the unemployment rate heading back to double figures over the next few months. It hardly needs saying that this would create problems for President Obama, who has staked his credibility on the economic recovery that began in mid-2009.
When healthy, the American economy grows at an annual rate of close to three per cent. The Commerce Department’s latest report on the gross domestic product (pdf) shows that between April and June, it expanded at an annual rate of 1.3 per cent, and between January and March it grew at an annual rate of just 0.4 per cent. The first-quarter figure is particularly stunning. Previously, the Commerce Department had estimated growth in the period at 1.9 per cent. What is to prevent a similar downward revision to the second-quarter figures? Nobody can say.
