In the life of almost all civilizations, a time comes where, as Yeats put it, “things fall apart.” The internal principles and assumptions that used to seem to work begin to break down. If the engines of growth have not ground to a halt, they certainly could use some fresh oil: stagnation replaces new opportunities. Everything that used to work suddenly doesn’t. What would have been an easy projection of power settles into a stalemate.
The United States has long been used to a steady pace of growth. A vibrant economy created more opportunities for Americans of all walks of life; the rising tide of growth really did lift all boats. This economic growth gave hope both to the nation as a whole and to distinct individuals. According to the U.S. Bureau of Economic Analysis, real U.S. gross domestic product (GDP) grew at an average annual rate of about 3.5% between January 1947 and January 2001. This rate of growth allowed for a doubling of the economy every 17-20 years.
Recent history tells a very different story, however. According to the BEA, between January 2001 and January 2012 the economy grew at an average annual rate of just 1.6%, less than half the average annual growth rate of the second half of the twentieth century. Nor can we entirely blame this stagnation on President Obama or even the Great Recession. During President George W. Bush’s presidency, from January 2001 to January 2009, annual GDP growth averaged 1.4%. Even during the period of growth between 2001 and 2007, annual GDP growth was just 2.7%. The supposed boom times in the past decade have lagged behind the average growth of the past; only about one year of the Bush presidency saw GDP growth greater than the average of the past. The Great Recession has only underlined the lost economic ground: as of April 2012, real GDP had only increased by about 2% since the economic peak of mid-2007. The U.S. economy has barely grown at all since 2007; that’s almost five years of average economic growth well under 1%.