But what of that Keynesian pump and that multiplier thing?
CBO also projected the jobless rate would rise to 8.9 percent by the end of 2012, and to 9.2 percent in 2013.
If the CBO estimate is correct, it would mean that the United States recorded a deficit of more than $1 trillion for every year of Obama’s first term. The deficit was $1.4 trillion in 2009, $1.3 trillion in 2010 and $1.3 trillion in 2011. The largest deficit recorded before that was $458 billion in 2008.
Good thing the CBO does not rely on optimism.
The higher unemployment numbers are due to lower economic growth than previously estimated. Gross domestic product for 2011 is now estimated to have grown 1.6 percent in 2011, down from the 2.3 percent forecast in August. CBO a year ago had predicted 3.1 percent growth for 2011. The outlook for 2012 has also worsened. GDP is forecast to grow only 2 percent this year, compared to a previous estimate of 2.7 percent.
Permanent Keynes, permanent deficits, permanent malaise ... Keynesian depression.