The Economy: Still Worse Than We Thought

It’s Friday! Which means another round of bad news for the economy. In this case, the Commerce Department has revised its assessment of economic growth for the second quarter. At the time, economists had estimated 1.3 percent growth for the quarter – sluggish, but an improvement over the first quarter, when the economy grew by an anemic 0.4 percent. The revision shows 1 percent economic growth for the second quarter, a sharp drop and lower than the decline expected by economic analysts.

In a rational world, these miserable numbers would spur lawmakers to action with programs to generate demand and put people back to work. As it stands, Republican policies from this spring have already removed billions of dollars from the economy, and congressional Republicans are working to repeat the performance, with further spending cuts and tax increases on working people. What’s more, the Federal Reserve has retreated into continued inaction; this morning, Chairman Ben Bernanke ruled out any new stimulus from the Fed, and all but pledged to offset any new demand in the economy with higher interest rates. As Matthew Yglesias put it, Bernanke has promised to deliver the nation high unemployment for years.

The political implications of this are obvious: Without serious economic growth over the next year, President Obama stands ready to lose his bid for re-election. But given the extent to which we all obsess over the political implications of everything, it’s worth setting them aside to focus on the human consequences of this stagnant economy. 25 million people are unemployed, underemployed, or no longer looking for work, and millions more are struggling to provide the basics of food, clothing, and shelter to their families. Minority communities have been punished by Great Depression-levels of joblessness, and young people – even if they have the skills to succeed – are entering a workforce devoid of meaningful opportunities.

Lawmakers know this – it’s not a secret. But thanks to an indifferent Republican Party and a White House paralyzed by timidity, it looks like these people will have to fend for themselves.

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