Floyd Norris explains why the picture for Global Growth has been disappointing:

“United States economy has been growing at its slowest rate since the Great Depression. Most other major developed countries have also experienced unusually slow growth over the last 10 years.

The American economy’s reported 2.8 percent growth in the fourth quarter, at an annual rate, was seen as mildly encouraging. But it meant that over the previous 10 years, the economy had grown at a compound annual rate of just 1.7 percent. Until the current cycle, there had been no similar prolonged period of slow growth since the Depression.”

Charts below reflect the IMF forecasts of 1.8% real growth in 2012 and 2.2% in 2013. For the US, the past decade will have fallen to 1.5%. This is well below trend for any prior 10-year American period — but still above the 0.9 percent compound growth rate in the decade from 1929, the year the Depression began, to 1939.

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Source:
A Bleak Outlook for Long-Term Growth
FLOYD NORRIS
NYT, February 3, 2012   
http://www.nytimes.com/2012/02/04/business/a-long-term-slide-in-growth-for-industrialized-economies.html

Category: Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

15 Responses to “Norris: US, Global Growth Outlook “Well below trend””

  1. Sechel says:

    The CBO is projecting 1% growth for 2013, below the Fed’s forecast.
    http://www.cbo.gov/ftpdocs/126xx/doc12699/01-31-2012_Outlook.pdf

  2. theexpertisin says:

    Back in the day, the old USSR launched, like clockwork, predictable “Five Year Plans” to solve internal economic problems – always blaming other ecomonic systems, western democracies and the Jews as impediments to the success of socialism.

    The end result of one Five Year Plan was another, then another. Always blaming the same forces. Picking winners and losers through massive subsidies.

    The Soviets produced great ballet and pianists. Their few symphony orchestras and best mathematicians and physicists were top notch. Meanwhile, the rest of the country, the 99%, pretended to work while they pretended to be paid (old Soviet punch line). We are entering into the same trap.

  3. Sunny129 says:

    The continuing ‘status quo’ benefits the 1% and their cronies who have bought media to keep brainwashing 99%, their corporations have already bought the elections irrespective of the BOZO of any party at the WH! Corporations are people too, per Supreme Court.

    Rest can keep on ranting on how greed and corruption is rampant but matters little unless a critical mass rise up with pitch and forks + rise in mass ‘domestic’ terror explosions against those in charge supporting the status quo!

    Oh, I am dreaming!

  4. Yossarian says:

    Please plot that along with Federal/State/Local govt spending as a % of GDP (hint: it will go lower left to top right) then ask ourselves: if what we are doing isn’t working should the correct conclusion be to do more of it? Also helpful would be a chart of monetary growth- indicative of the financialization of the economy- which balloons after the end of Bretton Woods and beginning of a strictly fiat currency.

  5. Winston Munn says:

    Instead of practicing capitalism, we have used our wealth reserves to bail out zombie banks, insure bondholder haircuts, and march off to war against an idea. Why should we expect growth from such shameful and wasteful utilization of resources?

  6. murrayv says:

    Actually the USA GDP growth trend has been linear since ca 1960 so the %age growth steadily declines. Trend line growth is now a bit below 2%. Recent growth spurts in the 4% range have been bubbles. No surprise here except for economists who insist to speak in terms of exponential growth.

  7. wally says:

    It looks like 3% real growth, fairly constant, for the last half-century. Then the housing bust. Once we are through that, which we will be some day, I’d expect the 3% trend to resume.

  8. The TRENDLines Recession Indicator uses proprietary heuristic algorithms to transform 14 economic data sets into an insightful GDP baseline thru to 2035. The uniqueness of its methodology minimizes false-positives & false -negatives.

    TRI quantification of present medium & long-term forward looking data suggests GDP is on a trajectory rising from a diminished o.9% pace in March (Q1) to 2.9% in September (Q3), then averaging 2.4% in 2013 & 2014. The GDP baseline wanes to to 1.8% by 2017Q4 and finally turns negative in 2031.

    TRI chart: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm

  9. algernon says:

    I’m as pessimistic as the next guy, but remember that beginning year, 2000, was the height of a huge bubble.

  10. SecondLook says:

    It looks like 3% real growth, fairly constant, for the last half-century. Then the housing bust. Once we are through that, which we will be some day, I’d expect the 3% trend to resume.

    Wally,

    Think a bit about what exponential growth is, and what it means. It’s a compounding, a doubling in X years of a sum. At 3% growth (real, not nominal), GDP would be twice as big in about 24 years; 4 times as big in 48 years, 8 times in 72…. 1024 times as big in 240 years.

    Try to imagine how our economy could grow at that rate indefinitely. Right now, per capita income is approximately $48,000. Imagine that being, in current dollars, $96,000 in 2035, $192,000 in 2069 and so on. Construct a scenario where there are no hard restraints on resources, capital, population – the drivers of real economic growth. if you can, then push the doubling out until everyone single soul in this country is at least a billionaire, in our dollars, – it takes less time than since the founding of the Republic.

    Think about that.

  11. SecondLook,

    by the same Token, it proves that ‘Lending ‘your’ Currency into existence, at Interest, is, similarly, ‘doomed to Fail’..

    too bad, for ‘Us’, that’s, exactly what the Federal Reserve does for ‘Us’/the U.S. ..

    (to say nothing of the vast majority of ‘Central Banks’, found, the World over..)

    if One were to believe their ‘Press releases’, One would think that the ACLU would have a ‘beef’ with the Federal Reserve, but..

    or, differently, the Federal Reserve is a major Fraud (and, at the same time, violating People’s ‘Civil Liberties’/'Rights’)..

    http://search.yippy.com/search?query=Federal+Reserve+Fraud&tb=sitesearch-all&v%3Aproject=clusty

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=the+11th+marble

  12. Malachi says:

    Pretty profound Secondlook. Thanks for the insight.

  13. mathman says:

    i was viewing the Bowl at half time and saw the Clint Eastwood “Halftime in America” commercial. Too bad that it won’t be a half hour long – probably more like 15 – 30 years.

    Mark: i think the ACLU only takes cases in law that they can argue, whereas the Fed seems to be a Congressional mandate (which arguably should be repealled) that nobody wants to challenge (ie. the Supremes probably won’t even hear their case). It’s like the EPA and greenhouse gases, where industry has all the money to influence Congress to work in their behalf and defund the regulators to the point where either there isn’t enough manpower to go after them or the EPA has to “pick their battles” (and can’t fight the big industrial polluters). Similarly with the TBTF banks and their “regulation.” Sad, isn’t it?
    Money has corrupted democracy so that it only works for the monied class.

  14. harrierpark says:

    Perhaps it is important to have a strong manufacturing sector. See The China Syndrome: Local Labor Market Effects of Import Competition in the United States, Autor, Dorn, Hanson http://econ-www.mit.edu/files/6613

  15. mathman,

    speaking of the EPA..

    http://water.epa.gov/polwaste/wastewater/treatment/biosolids/index.cfm

    http://sourcewatch.org/index.php?title=Biosolids

    http://green.blogs.nytimes.com/2009/04/16/biosolids-and-human-health/

    Why? exactly are ‘They’ worried about GHGs, when ‘they’ can’t, even, get simple (and provable) Chemistry correct?

    or, differently, this ‘…where industry has all the money to influence Congress…’-'Argument’ has, serious Limits..
    ~~

    from a different facet..

    Why? is it, that in ~all of those ‘biosolids’ “Stories”, you never hear of..
    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=Methane+bio-digesters