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GDP growth of 3.2 percent ain't good enough

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Mary Altaffer/AP/File

(Read caption) Shoppers walk past the the Oscar de la Renta display at the Saks 5th Ave. retail store in New York earlier this month. Although the economy saw GDP growth of 3.2 percent, it should be growing faster at this point in the recovery.

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The advance number for Q1 growth was released today: 3.2 percent (this link is to a WSJ summary of economist opinions). Three-point-two would be good in normal times, but it's not enough to catch-up to where the U.S. economy "should" be.

I'm skeptical this is a solid recovery. I'm skeptical there won't be a double dip. Why? Because interest rates are very low and have to rise sometime soon, because federal spending stimuli are fading, because I believe in a place called California, and because so much of the durable consumption seems driven by cut-rate deals (Toyota in Q1 offered zero-percent financing for the first time in history). Thin ice.

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This would be a good time to reread Mankiw's argument that this is a Unit Root recession, not a Trend Stationary recession. A rebound to normalcy would be nice, but we all know better than to believe the housing bubble defined normalcy. It's time to shelve fantasies that a stimulus, any stimulus, can or should get America back to artificial prosperity.

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