"Austerity, Shutdown Knocked Almost 25 Percent Off Economic Growth"
The American economy grew by 2.7 percent over the course of 2013 and at a 3.2 percent annual rate for the fourth quarter, the Commerce Department reported Thursday.
The fourth-quarter figure was about what economists had expected for the period, and it was a bit slower than the 4.1 percent growth rate from the previous three-month stretch. The report contrasts starkly the fourth quarter of 2012, when sudden and drastic government spending cuts made in anticipation of sequestration helped cause an abysmal 0.4 percent growth rate for the final few months of that year, and multiple expert analysts viewed Thursday’s number as a sign that the U.S. recovery is strengthening.
But spending cuts still put a damper on total economic output 2013, as this chart from Quartz shows:
Fourth-quarter GDP growth would have been 4.2 percent instead of 3.2 percent if it had not been for spending cuts and the government shutdown pulling huge sums of money out of the economy. Total economic output would have been 0.43 percentage points larger for the year if government investment in the economy had only been flat rather than shrinking due to austerity measures.
But this isn’t a new story so much as the continuation of a pattern of economic self-harm that began when the newly-minted Republican House majority began to successfully drive fiscal policy in the wrong direction starting in 2011. Rather than buoying economic growth, U.S. fiscal policy has placed a drag on the economy nearly every quarter since the Tea Party class of legislators was sworn in. Without those austerity measures, GDP would be far higher and unemployment would be far lower.