TREASURY: Here's The True State Of The Economy Right Now

timothy geithner

Photo: AP Images

The US Treasury department has put out a new presentation on the state of the economy.It’s fairly non-biased in its assessment of things.

The presentation acknowledges that the economy has a lot further to go to get to a real “recovery” but it does point out what the economy has done since the crisis, and what’s held it back.

There are some great charts in there on the connection between the unevenness of the recovery and various external factors like the Japanese earthquake, the debt ceiling debacle, and of course Europe.

It spends a lot of time on public sector fiscal drags.

It also attempts to clear up other misconceptions, such as the tax burden (it’s not that high) and regulations (which haven’t grown very much).

All in all, it’s a very useful presentation.

It's been non-stop growth since the crisis, but there have been major headwinds including the Japanese earthquake, oil, Europe, and the debt ceiling.

In terms of growth components, private sector has done much better than the public sector, which has been a drag

The US is clearly the best of a bad lot

Households are still way down in terms of lost wealth.

Again, the government has been a big net drag.

There have been some persistent myths about why growth has been weak.

If you look at business investment, there's no evidence that regulation has been an issue.

Furthermore, corporate profits have been excellent.

The tax burden really isn't that high.

Meanwhile, proposed tax hikes by the President are tiny.

Almost no small businesses would be hurt by the tax changes.

Government growth has been virtually nil.

The market is showing no concerns about the government.

Final notes.

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