The Republican recession–the longest and worst economic downturn since the Great Depression–is officially over:
The U.S. economy expanded in the third quarter after shrinking for four consecutive quarters, marking an apparent end to the worst recession since World War II. But the recovery is expected to be slow and painful, as companies shed jobs and credit remains tight.
Gross domestic product expanded at a 3.5% seasonally adjusted annual rate in the quarter ended in September, a rise that leaned heavily on government spending. Some of the largest components of growth came from spending on cars and house building — two areas propped up by federal programs.
But wait, there’s more:
Stimulus Fueled Much of Expansion
The U.S. economy would have turned in a far worse performance in the third quarter without help from the federal government. Now the question is whether growth can continue without that support.
More than one percentage point of GDP growth in the third quarter came from car sales, driven in a large part by the temporary “cash for clunkers” program. After surging in July and August, retail car sales dropped 10.4% in September, suggesting the auto sector won’t provide such a big boost again any time soon.
Spending in the third quarter was also propped up by home building, which rose for the first time since 2005, by a whopping 23.4%, and contributed a half-percentage point to GDP growth.
But much of the housing revival reflects government efforts to push down mortgage rates, prevent or at least slow foreclosures, and reward home buyers with tax credits.
[All emphasis mine]
In other words, the longest economic downturn in modern history has ended thanks to the government spending programs and increased regulation that the right has made the cornerstone of their opposition to Barack Obama’s Presidency.
So all of those Republicans who criticized the economic stimulus package; who repeatedly and prematurely declared its failure; who attacked the cash for clunkers program; who whined about new regulations; who suddenly became deficit hawks at the sight of a Democratic President–all of those Republicans were absolutely, utterly and completely wrong nearly every step of the way.
Thanks for playing, conservatives, and better luck next time, because President Obama and the Democratic Congress just successfully cleaned up the mess that your President and your Congress spent 6 years creating, and he did it all in just 9 months.
So thank you, President Obama. And thank you Speaker Pelosi and Majority Leader Reid, for standing up to the obstructionist Republicans and making the tough decisions that ended the worst economic downturn in modern American history.
The GOP may still maintain their fantasy of a Republican takeover in 2010, but something tells me that a year from now–a year of solid economic growth from now–they going to be singing a very different tune.
UPDATE: Anyone who didn’t sleep through introductory economics knows that employment is what is called a lagging indicator–in other words, employment tends to improve later than the overall economy.
I mention this because I fully expect Republicans to start carping about the “jobless recovery,” and I just want to remind everyone of the fact that, even though we’re experiencing economic growth right now, it may take slightly more time for that growth to extend to the job market.