US economy - How much more to go?

There has been much debate (and here and here) about where the US economy stands in relation to previous post-war recessions. The Federal Reserve Bank of Minneapolis compares the changes in output and employment over ten recessions (as defined by NBER) since 1946, with average length of 10.5 months (more from here). The present recession has been officially on since December 2007.

In terms of employment, US is just crossing the point where this recession becomes “worse” than the median recession of the last 60 years:




And in terms of output, US is currently at the level of the mildest recession in the postwar period:




Judging from both figures, the US economy appears to have some way to go before normalcy is restored, even assumung a median recession.

Paul Krugman, using latest projections from the CBO, finds that a severe deflation is possible and the US could end up with deflation at a rate of -3.5%. The CBO's unemployment projections find a cumulative excess unemployment (actual minus the natural rate) of 13.9 point-years. Krugman also uses the CBO outlook on GDP, which predicts an 8% plus actual-potential GDP gap, to argue that the Obama Plan at 3% of GDP will be a small blip on the screen.



Update 1
David Leonhardt draws attention to the fact that in recent recoveries, the employment has been very slow to get back to normalcy.