Did It End or Was It Killed?

At Atlantic Annie Lowrey has a combination of a profile of Brad DeLong and a review of his long-awaited book, Slouching Towards Utopia, the thesis of which, apparently, is that the age of continuing GDP growth and increasing prosperity in the United States which began, according to Dr. DeLong’s reckoning, in 1870, ended in 2010.

It’s not entirely clear to me how the date 1870 was selected other than “after the Civil War” makes a convenient starting point. Here’s a graph of U. S. GDP per capita from 1790 to 2000:

which shows a rather remarkable continuity in growth going all the way back to 1790.

How he picked 2010 is easier:

Here’s my question. Did that growth just “end” or was it killed?

I think the latter and several explanations occur to me, all of which are probably true in varying degrees. For the first imagine a U. S. economy that consisted primarily of financial services and personal service that could not easily be imported. That is the world of the failed experiment called “Chimerica” and 2010 is as good a date as any to place as its beginning. For some that was a utopian vision. For me it was dystopian in the extreme. Just to cite one reason I think it dystopian, that’s a U. S. of extreme inequality in income—a handful of very, very wealthy individuals, some highly credentialed and licensed professionals, and a lot of the working poor.

Another explanation is that 2010 is when it became quite clear that the federal government would bail out big companies however poorly they performed, particularly banks.

A third explanation is that 2010 is when the federal debt went above 100% of U. S. GDP for the first time in our history.