At MoneyWatch, Will Consumption Growth Return to Its Pre-Recession Level? discusses this graph comparing the path of consumption in the current recession to the path of consumption in the three most recent recessions, and there is a brief discussion of why consumption growth is likely to be lower in the future:
It's (past) time for the administration to get serious about creating jobs:
The Jobs Imperative, by Paul Krugman, Commentary, NYTimes: If you're looking for a job right now, your prospects are terrible. There are six times as many Americans seeking work as there are job openings, and the average duration of unemployment ... is more than six months, the highest level since the 1930s.
You might think, then, that ... the employment situation would be a top policy priority. But now that total financial collapse has been averted, all the urgency seems to have vanished... There's a pervasive sense in Washington that ... we should just wait for the economic recovery to trickle down to workers.
This is wrong and unacceptable. ... Historically, financial crises have typically been followed ... by anemic recoveries; it's usually years before unemployment declines to anything like normal levels. And all indications are that ... the latest financial crisis is following the usual script. ...
And the damage from sustained high unemployment will last much longer. The long-term unemployed can lose their skills... Meanwhile, students who graduate into a poor labor market ... pay a price in lower earnings for their whole working lives. Failure to act on unemployment isn't just cruel, it's short-sighted.
So it's time for an emergency jobs program.
How is a jobs program different from a second stimulus? It's a matter of priorities. The 2009 Obama stimulus bill was focused on restoring economic growth. ... That strategy might have worked if the stimulus had been big enough — but it wasn't. And as a matter of political reality, it's hard to see how the administration could pass a second stimulus big enough to make up for the original shortfall.
So our best hope now is for a somewhat cheaper program that generates more jobs for the buck. Such a program should shy away from measures, like general tax cuts, that at best lead only indirectly to job creation... Instead, it should consist of measures that more or less directly save or add jobs.
One such measure would be another round of aid to beleaguered state and local governments... More aid would help avoid ... the elimination of hundreds of thousands of jobs.
Meanwhile, the federal government could provide jobs by ... providing jobs. It's time for at least a small-scale version of the New Deal's Works Progress Administration, one that would offer relatively low-paying (but much better than nothing) public-service employment. There would be accusations that the government was creating make-work jobs, but the W.P.A. left many solid achievements in its wake. And the key point is that direct public employment can create a lot of jobs at relatively low cost. ...[T]he Economic Policy Institute, a progressive think tank, argues that spending $40 billion a year for three years on public-service employment would create a million jobs, which sounds about right.
Finally, we can offer businesses direct incentives for employment. It's probably too late for a job-conserving program... But employers could be encouraged to add workers as the economy expands. The Economic Policy Institute proposes a tax credit for employers who increase their payrolls, which is certainly worth trying.
All of this would cost money, probably several hundred billion dollars, and raise the budget deficit in the short run. But this has to be weighed against the high cost of inaction in the face of a social and economic emergency.
Later this week, President Obama will hold a "jobs summit." Most of the people I talk to are cynical about the event, and expect the administration to offer no more than symbolic gestures. But it doesn't have to be that way. Yes, we can create more jobs — and yes, we should.