... given the Commerce Department's Q2 release today, with it's estimated 32.9% drop in GDP and the Labor Department's Unemployment Insurance Claims Report for the week ending July 25 showing a continuing rise in claims and an increase of .5% in the insured unemployment rate. Here's a helpful graphic from Fortune illustrating what the economists mean when they refer to a reverse square root recovery:
The impact of this reverse square root shaped GREATER Recession recovery on state and local revenues will continue to be disastrous for as long as the "tail" stays under +2% .
The macroeconomic management case for more federal fiscal policy intervention - including replacement of non-recoverable state and local tax and fee revenues - has become more urgent with the release of these two reports.
Will Congress heed the lessons of the "merely" Great Recession when continued state and local government spending reductions roughly equaled - and thus negated - the federal fiscal policy stimulus spending, prolonging that recession. Will Congress take the action necessary to at least limit the duration of today's GREATER Recession?
Comments