Robert Higgs has another must read in his “Etceteras … Real Gross Domestic Private Product, 2000-2012” in the most recent Independent Review.
He provides good arguments on why government product should be (and perhaps almost was) excluded from income and product accounts. He then builds a measure of Real Gross Domestic Private Product for the Bush-Obama years.
Based on his calculations, he states, “Perhaps the most positive statement we can make about the private economy’s performance during this thirteen-year period is that it has been somewhat better than complete stagnation.” Recent daily articles have highlighted how the Hoover-Roosevelt Great Depression was the result of bad policy and accompanying regime uncertainty (see here and here). Drawing on work by Mark Thornton (“Hoover, Bush, and Great Depressions”), I have been, too slowly, working on an argument that U.S. is currently in the middle of the Bush-Obama Great Stagnation. A Great Stagnation caused by bad policy and the associated regime uncertainty. This new data helps cement the case.
Professor Higgs might be even more pessimistic:
If the government and the Fed persist in the kind of destructive policies they have undertaken since 2007, the potential for another great depression will remain. Even without such a catastrophe, the U.S. economy presents at best the prospect of weak performance for many years to come.