This is an excellent piece from Paul Krugman that essentially states the obvious:
This isn’t a recovery, in any sense that matters.
He rightfully points out that GDP growth means nothing at this point. Whether GDP is at +2% or -2% does not matter because our unemployment numbers are not coming down. We need jobs, not “productivity.”
I’d like to add that many of his proposed ideas are (obviously) smart, but they are all short-term strategies. We can toy with interest rates and change perceptions on inflation, but at the end, those are just numbers games. If we want to spurreal growth, we need to invest in long-term assets: infrastructure and human capital.
We need to invest in infrastructure because such investment not only creates jobs in the short term, but improves our societal quality of life in the long term. Not to mention that businesses flock to communities with stronger infrastructure.
Also, we need a more productive education system that will make our citizenry smart and competitive again. Without this, jobs will continue to head overseas.
Unfortunately, these may not spur GDP growth in the near term, so our myopic policy-makers are most likely considering other options.