With a broad, ambitious campaign to attract more people to boating, the marine industry has waited for the sluggish U.S. economy to return to its historical average growth rate above 3 percent, but some economists don’t believe that will happen anytime soon.
A New York Times report finds that an increasing number of experts see the country as having entered an era of slow growth after the Great Recession. The economy bounced back reliably after the Great Depression and subsequent recessions, but the federal Department of Labor said in a report last year that the recent recession “left lasting scars on the economy.”
The report declared slower growth “the new normal” for the American economy. The Federal Reserve, persistently optimistic in its previous forecasts, said in March that it no longer expected a full recovery in the foreseeable future.
In the five years since the Great Recession ended, the nation’s total annual output has moved substantially above its prerecession peak, but economic growth has averaged only about 2 percent a year, well below the historical average.
Household incomes stagnate and millions of Americans still can’t find jobs. A growing number of experts see evidence that the economy will never rebound completely.
Lawrence H. Summers, formerly President Obama’s chief economic adviser, has warned that growth might fall short of expectations unless the federal government increases its spending on things such as upgrading deteriorating roads and bridges and the development of new technologies.
“A soft economy casts a substantial shadow forward onto the economy’s future output and potential,” he said in a speech in April.
The Times said the pessimism is a striking departure from economic orthodoxy. Recessions cause considerable suffering, including permanent disruptions to individual lives, but most economists have long asserted that recessions do not reduce the economy’s capacity to supply goods and services.
Some economists still expect a complete recovery. They say it takes a long time to recover from financial crises, and that the healing process has been set back unexpectedly by cuts in government spending, by Europe’s woes and, most recently, by a hard winter.
Other economists, also committed to the orthodox view of recessions, argue that the slower growth is here to stay, but say it is the result of longer-term trends that predate the recession, such as fewer Americans entering the workforce and less innovation.
“We have recovered” from the recession, Tyler Cowen, a professor of economics at George Mason University, told the Times. “We just don’t like what that looks like.”