This chart is making the rounds. It shows the CBO's projected estimate of the output gap — lost GDP — through 2015, when its projections inexplicably show it ending.
Krugman comments (my emphasis):
No, I don’t know where that recovery in 2015 is supposed to come from; my guess is that it’s basically the CBO unwilling to project a depressed economy more or less forever. But even with that bounceback assumed, the projection says that we’ll have a cumulative output gap of $5.1 trillion, with $2.8 trillion of that having already happened.The Professor also notes that CBO projected unemployment will hold above 8% in the same estimates (and inexplicably end at roughly the same time, 2015).
I agree with Krugman; there's a lot of "there" between here and there, and "there" may be 2025, not 2015, as far as anyone really knows.
I put the over-under for 2012 headline unemployment above 10%, and for real unemployment nearer 18% or so. We'll see.
Team Smarter than You seems to have put their faith in the 2012 Recovery Fairy, for all the effort they've put into fixing this. Think that fairy will show up? Or is he off hanging out with the Confidence Fairy at the You Wish Bar & Grill?
GP
