Brad DeLong should have listened to us
, long ago. He then might have been able to avoid having to admit this
A year and a half ago, when some of us were expecting a return to
whatever the path of potential output was by 2017, our guess was that
the Great Recession would wind up costing the North Atlantic in lost
production about 80% of one year’s output–call it $13 trillion. Today a
five-year return to whatever the new normal might be looks
optimistic–and even that scenario carries us to $20 trillion. And a
pessimistic scenario of five years that have been like 2012-2014 plus
then five years of recovery would get us to a total lost-wealth cost of
At some point we will have to stop calling this thing “The Great Recession” and start calling it “The Greater Depression”. When?
When DeLong votes for a Republican? Hell freezes over?
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