Brad Delong: GDP Stalling - This is Bad.

DeLong: Macroeconomic Advisers is revising their tracking forecast of real GDP growth in the second quarter. It now looks as though, come July 1, that there will have been no gap-closing in the six quarters since the start of 2010.  That means it is

• Time for Quantitative Easing III...
• Time for pulling more spending from the future forward into the present, and pushing more taxes from the present back into the future...
• Time to use Fannie and Freddie to (temporarily) nationalize mortgage finance and fix the ongoing foreclosure crisis...
• Time for a weaker dollar...

Update:  Krugman agrees:  As Brad says, these estimates now suggest that we have now gone through a year and a half of “recovery” that has failed to make any progress toward closing the gap between what the economy should be producing and what it’s actually producing.