Ryan Avent brings us the bad news from Christina Romer’s budget talk:
[CEA Chair Christina Romer] then gave the unemployment forecast. At the end of 2010, the unemployment rate, according to the administration’s forecast, will be 9.8%. At the end of 2011, the rate will be at 8.9%. And at the end of 2012, after the next presidential election, the unemployment rate will be 7.9%.
Some historical context:
We’re looking, in other words, at years worth of “recovery” during which the unemployment rate will be at what would normally be deemed recession levels. And the plan from both the Fed and the OMB seems to be to accept this—fiscal retrenchment and no further monetary action.