I believe you know that a 2.4% number in a GDP report means “an annual growth rate” of that number,” i.e., if the economy will for twelve months grow as it did in the previous quarter, the economy will grow by a total of 2.4%.
I believe you also know that a 2.4% number is a 2.4% growth rate over a quarter earlier. Meaning, the economy in the Second Quarter grew on a rate of 2.4% over where the economy was in the First Quarter. This means, if the economy contracted sharply (steep recession) for a year or two, and then we have growth rates of 2-3 percent, it is much smaller in actual economic activity than if we have 2-3 percent growth rates following a strong or modest year of economic growth.
Once you know this, you ‘get’ a few things regarding the 2.4% of the recent quarter:
1) Economic growth is still VERY bad, considering that we are coming off a VERY steep decline in economic activity yet the growth rates on average of the last four quarters were a mere 3.1% (quarter over quarter).
2) The economic growth during the Clinton-Bush-Parrot election year of 1992 was doing just fine, considering that the average quarter-over-quarter growth rate was 4.3%, in addition to the fact that it followed a very light recession a year earlier.
3) The average quarter-over-quarter growth rates of 1983, which followed shortly after most Reagan Tax Cuts kicked in, was 7.7%. This means, Reaganomics were WAY more affective and productive – in terms of GDP – compared to what the Stimulus has to show for itself, despite the fact that 60% of it is already out the door.
Next Time a Dem tells you “it could have been worse,” tell them “it could have been better.”
