CBO Director: This Recovery ‘Certainly Much Weaker’ than Previous Recoveries

ELMENDORF Thank you Mr ░░░░░░░░ The principal reason why ░░░░░░░░ economic growth will be ░░░░░░░░ over the coming decade ░░░░░░░░ it was in previous ░░░░░░░░ is as I mentioned ░░░░░░░░ my opening statement slower ░░░░░░░░ of the labor force ░░░░░░░░ was in demographic trends ░░░░░░░░ federal fiscal policy will ░░░░░░░░ some role as well ░░░░░░░░ principal but we ve ░░░░░░░░ those things over the ░░░░░░░░ several years and the ░░░░░░░░ reasons that we ve ░░░░░░░░ down our projections of ░░░░░░░░ growth in this projection ░░░░░░░░ in a number of ░░░░░░░░ ones as the chairman ░░░░░░░░ is because the performance ░░░░░░░░ the economy during the ░░░░░░░░ several years has been ░░░░░░░░ and we ve taken ░░░░░░░░ signal from the elements ░░░░░░░░ over the past few ░░░░░░░░ for our projections for ░░░░░░░░ future In particular for ░░░░░░░░ forecast we have observed ░░░░░░░░ actual productivity growth has ░░░░░░░░ a good deal weaker ░░░░░░░░ we ve got the ░░░░░░░░ productivity growth of the ░░░░░░░░ could be and some ░░░░░░░░ between the actual productivity ░░░░░░░░ and the potential productivity ░░░░░░░░ would be expected in ░░░░░░░░ weaker economy because if ░░░░░░░░ don t feel strong ░░░░░░░░ for their business services ░░░░░░░░ workforce is not generally ░░░░░░░░ as hard But there ░░░░░░░░ a growing divergence between ░░░░░░░░ path of productivity growth ░░░░░░░░ thought the economy could ░░░░░░░░ on and the path ░░░░░░░░ it was on And ░░░░░░░░ the economy has been ░░░░░░░░ that gap should be ░░░░░░░░ not widening So we ░░░░░░░░ that we d take ░░░░░░░░ a signal from the ░░░░░░░░ observer productivity growth and ░░░░░░░░ down our projection of ░░░░░░░░ productivity growth the trend ░░░░░░░░ productivity growth if you ░░░░░░░░ that the economy was ░░░░░░░░ back to NN PERSON ░░░░░░░░ the effect that has ░░░░░░░░ our budget ELMENDORF Widening ░░░░░░░░ reduction in GDP makes ░░░░░░░░ budget outcome worse principally ░░░░░░░░ with lower GDP that ░░░░░░░░ lower incomes which brings ░░░░░░░░ tax revenues Also to ░░░░░░░░ extent lower incomes mean ░░░░░░░░ spending in certain government ░░░░░░░░