No I don’t think it is a narrative at all. Given the cost to service our debt if we even see a modest rise in the interest rates we are in big trouble. I agree with you about war spending. We may or may not see an economy to 2004 growth levels but I doubt we will see sub 5% employment levels. Seems to me we are also seeing substantial increases in general welfare spending, food stamps, etc. While reduction in defense spending is needed, the resulting rise in unemployed white collars will not be consumed by the private sector.
So, I guess while your post makes sense about a few drops here and there, physical evidence especially over the past 4 years are absolutely contrary to it. I guess we will see how things go this year.
So yes to me it is a spending issue and that is not just narrative. It was under Bush and it has been perpetuated by Obama.
