Baker: 10 years of economic doldrums ahead

With a recalcitrant GOP House and sequestration coming, if Obama sticks to his guns but makes no progress in negotiations, then we'll have spending cuts and tax increases in 2013, or austerity by default.  And zero chance of more necessary fiscal stimulus.  

Here's how liberal economist Dean Baker sums up U.S. economic prospects:

The number of jobs in the economy is roughly 9 million below the trend level. The recent pace of job growth has been approximately 170,000 a month. The economy needs to generate 100,000 jobs a month just to keep pace with the growth of the labor force.

This means that it would take almost 130 months, more than 10 years, for the economy to generate enough jobs to make up its 9 million shortfall at its recent growth rate. That is not a very good picture.

It is difficult to envision a scenario that looks much better. The housing market is recovering and that will provide a modest boost to growth, but it is not likely we will return to the construction rates of the boom years. Trade may be a small positive in the years ahead, but with the economies of most U.S. trading partners also weak, it is unlikely that trade will provide much of a boost in the near future.

The Post-Election Economic Blues

By Dean Baker

November 16, 2012 | Counterpunch

URL: http://www.counterpunch.org/2012/11/16/the-post-election-economic-blues/