Think about it... What happens as we put the 6.6mln who lost jobs in this recession back to work (nonfarm jobs figure)?
If population grows 1%/yr with the labor force doing the same and productivity is up by 1-1.5% that means trend growth is 2% to 2.5% per year.
Then there is that 6.6mln to put back to work. To give you perspective, they comprise 5.1% of total employment.
What happen to them?
Suppose it takes 5 years to get them all back to work.
That means we take 1% POINT of the 5% POINTS each year. So for FIVE years 'trend plus 'make up growth' is 3% to 3.5%. That's trend plus another one percent per year.
You get the point?
The economy will not be puttering along at 2%-2.5% any time soon.
Moreover we have labor force in-migration and the labor force will grow faster than population. People will go back to work and spend in excess of their income (YES THEY WILL) for a while because they have postponed many purchases. At some point down, the road we will have to confront other issues like the extent of debt and reduced portfolio values more savings, etc.
But forget talking to economists or low-growth believing portfolio managers. Just use your head.
Do you really think that 6.6million people are going to be left unemployed..forever? Don't you think that the stimulus plan spending that lies ahead and the people that need to work will ignite growth in the private sector? Don't you think that job means income and income means spending and that there is a HUGE potential for growth to ignite over the next five years???
Don't you think that one of the reasons debt has dropped and spending is off so sharply is that 6.6mln fewer people are working? This not just current working people spending less. Put on your thinking cap. Take off those blackened glasses.
DO NOT WRITE OFF the unemployed and try to 'project' an economy that will only limp along at 2% to 2.5% - the long term trend (please bow). THAT is not going to happen.
If you believe that it can then...
YOU ARE LIVING IN THE WRONG COUNTRY.