by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Alex Adrianson of the Heritage Foundation’s “Insider Online” blog highlights a recent analysis of the American economy as a “slow-growth machine.” That description comes from Wall Street Journal editors, who argue that “the worst expansion in 70 years has been even weaker than we thought.”
The gnomes at the Bureau of Economic Analysis ran the numbers based on new data and analytical methods and downgraded the recovery since 2011 nearly across the board. From 2011 through 2014, the economy grew at a paltry annual rate of 2%, down from the previous estimate of 2.3%. This means the overall U.S. economy is smaller—with GDP slashed by $105 billion in 2013 and $71 billion in 2014 to $17.35 trillion.
Those numbers are abstractions, but another way to put it is that national income, corporate profits and personal income were all revised down. From 2011 through 2014, the average annual growth of real disposable personal income was slashed to 1.5% from 1.8%. That’s a giant cut in the standard of living.
Since the recession ended in June 2009, the economy has grown at an annual rate of about 2.1%. That’s 0.6-percentage points worse than even during the much-maligned George W. Bush expansion. […]
Maybe it’s time to try something new—or, more precisely, return to the policies we know worked so well in the past. Freeze and roll back stifling regulation. Reform the tax code to unleash investment and raise wages. Modernize America’s creaky 20th-century public institutions, including health care, and K-12 and higher education. Welcome the world’s most talented immigrants to our shores. And restore monetary policy to its appropriate job of maintaining price stability.