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The [[Congressional Budget Office]] reports the GDP output gap (the difference between actual GDP and potential GDP if all labor and [[capital]] were fully employed) is about 6.5 per cent, and economic growth for the next few years [http://www.cbo.gov/ftpdocs/108xx/doc10871/Summary.shtml "will probably be muted.]" The US economy has no recent experience of living with an output gap of anywhere near this level.

The [[Congressional Budget Office]] reported the GDP output gap (the difference between actual GDP and potential GDP if all labor and [[capital]] were fully employed) is about 6.5 per cent, and economic growth for the next few years [http://www.cbo.gov/ftpdocs/108xx/doc10871/Summary.shtml "will probably be muted.]" The US economy has no recent experience of living with an output gap of anywhere near this level.

 

[[File:Output Gap Q2 2010.JPG|200px|right|thumb|The Output Gap]][[File:Workforce_participation.JPG|200px|right|thumb|Declining Workforce participation: a way to hide real [[Unemployment]].]]

[[File:Output Gap Q2 2010.JPG|200px|right|thumb|The Output Gap]][[File:Workforce_participation.JPG|200px|right|thumb|Declining Workforce participation: a way to hide real [[Unemployment]].]]

'''The Output Gap:''' a reflection of actual vs potential output. The U.S. economy is operating 6.5% below its productive capacity. At 1% growth, it will take the better part of a decade to return 10% of the workforce to employment, barring no other unforseen disasters.  The two Stimulus packages, since the Democrats took control of Congress in January 2007, represent an incredible waste of precious resources which could have been used to foster job creation rather than add to a colossal foreign debt.

===The Output Gap===

The Output Gap is a reflection of actual vs potential output. The U.S. economy was operating 6.5% below its productive capacity. At 1% growth, it would take the better part of a decade to return 10% of the workforce to employment, barring no other unforseen disasters.  The two Stimulus packages, since the Democrats took control of Congress in January 2007, represented an incredible waste of resources which could have been used to foster job creation rather than add to a colossal foreign debt.

The original term [[Keynesian]] [[New Deal]]ers used for the unemployed was "[[New_Deal#Double_dip_recession|wastage]]."

The original term [[Keynesian]] [[New Deal]]ers used for the unemployed was "[[New_Deal#Double_dip_recession|wastage]]."

Another factor affecting the Output Gap since the '''[[110th Congress|Pelosi/Reid Congress]]''' took office is the reported decline in Workforce participation.<br>

Another factor affecting the Output Gap since the '''[[110th Congress|Pelosi/Reid Congress]]''' took office is the reported decline in Workforce participation.<br>

[[File:Average weekly hours.JPG|200px|right|thumb|Workers suffered smaller paychecks during FRecovery Summer.]]

[[File:Average weekly hours.JPG|200px|right|thumb|Workers suffered smaller paychecks during FRecovery Summer.]]

Workers during '''Recovery Summer''' are making less money due to a decline in the average number of hours worked per week. Likewise fewer payroll hours does not bode well for the Unemployed, as payroll hours are first to be increased before an employer hires more workers. Declining payroll hours and Workforce participation are two examples of 'under utilization of resources' contributing to the Output Gap.

Workers during '''Recovery Summer''' were making less money due to a decline in the average number of hours worked per week. Likewise fewer payroll hours does not bode well for the Unemployed, as payroll hours are first to be increased before an employer hires more workers. Declining payroll hours and Workforce participation are two examples of 'under utilization of resources' contributing to the Output Gap.

==Stimulus edges [[Unemployment]] higher==

==Stimulus edges [[Unemployment]] higher==