Karl Smith says that if we had (i) an expansionary fiscal policy and (ii) had fixed housing financing that we would be having a strong reovery right now:
Notes on Bernanke GDP and Growth: The headline on this report is sobering but the internals don’t look as bad. Government knocked over 1 point off GDP. About .69 of that was defense spending. State and local continued to drag at .41 percent.... Equipment and software continues to be strong, adding .8 points to GDP. We have experienced a strong rebound in equipment and software, that would be indicative of a mini-boom if there wasn’t the drag from construction.... Residential and non-residential structures continued their drag on GDP, knock .7 or so off of growth.... The fundamentals still seem like they are shifting towards stronger growth. We are not seeing depressed personal consumption expenditures. We are not seeing industrial production stall out. We are not seeing no new investment in equipment and software.
So why don't we have more expansionary fiscal policy right now? Why haven't we fixed housing finance?