Two weeks ago, we learned US GDP was growing at a lackluster 1.2% pace in Q2. It’s nothing to get too excited about.

But in a new interview with Politico Playbook, billionaire Warren Buffett argues that we should think about GDP growth in the context of the economic crisis from which we’re recovering.

“What you’ve seen overall since 2008 and ‘09 – that was a wound to the American psyche,” Buffett said. “People were scared silly then … really we hadn’t had since the Great Depression.”

Simply put, it’s trauma.

“Some people are still recovering from the trauma of what happened in 2007-2008,” President Barack Obama said in an interview with Yahoo Finance’s Nicole Sinclair. “You know, we went through a really scary time.”

Economies go from expansion to contraction and expansion again all of the time. But the magnitude of the cycle can have long-lasting psychological effects. Just ask any adult in the labor force who has been jobless for an extended period of time. This trauma of getting crushed by debt payments while jobless can explain why consumers are reluctant to borrow money even as interest rates are near 0%. And so since the recession ended in 2009, the US economy has been growing below the 3% long-term rate we’re used to.

“We’re showing 2% growth, which isn’t bad,” Buffett argued.

“Same thing happened in the Great Depression,” Buffett said. “People don’t get over that very quickly. When they started worrying about their money-market funds, and they start worrying about their jobs and they worry about the economy coming off the tracks, and banks and everything else, they don’t forget about that six months later.”

Read the whole interview at Politico.com.

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Sam Ro is managing editor at Yahoo Finance.
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