The Word Is That Fourth-Quarter Real GDP Growth Is Likely to Come in at Something Like 1.0%-1.5%, Measured as an Annual Growth Rate…

That is to say, the word from the Macro Advisers and the Morgan Stanleys and the others who do real-time tracking is that it now looks most likely that the value of production (adjusted for inflation, and for the normal seasonal cycle in production) over October-December is going to be somewhere between 0.25% and 0.375% above the value of production in July-September. No signs of closing any of the 8% gap between the current level of production and what I think the economy’s stable-inflation productive potential currently is. Increasingly strong signs that the large amount of idle potentially-productive labor, idle capital, and slack investment is casting a dark shadow on our productive capacity in the future: the way I put it is that each month now we lose $100 billion in useful goods and services we would have produced if the macroeconomy were properly balanced at its stable-inflation potential, and that we lose another $300 billion from the drag that delaying recovery from this deep downturn for yet another month imposes on the future potential productive powers of the American economy.

This is a disaster…

And it was not that long ago that I was debating with myself about whether the long-run rate of real GDP growth in the American economy was closer to 2.5%/year, 3.25%/year, or 4.0%/year…