James Pethokoukis writing at Reuters quotes at length from a new report by Goldman Sachs that, he says, dropped an economic bomb on President Obama's chances for reelection." The report offers a doleful estimate for unemployment by election 2012 while advancing the possibility of a double dip recession:

Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8¾% at the end of 2012.

The main reason for the downgrade is that the high-frequency information on overall economic activity has continued to fall substantially short of our expectations. ... Some of this weakness is undoubtedly related to the disruptions to the supply chain-specifically in the auto sector-following the East Japan earthquake. By our estimates, this disruption has subtracted around ½ percentage point from second-quarter GDP growth. We expect this hit to reverse fully in the next couple of months, and this could add ½ point to third-quarter GDP growth. Moreover, some of the hit from higher energy costs is probably also temporary, as crude prices are down on net over the past three months. But the slowdown of recent months goes well beyond what can be explained with these temporary effects. ... final demand growth has slowed to a pace that is typically only seen in recessions. .. Moreover, if the economy returns to recession-not our forecast, but clearly a possibility given the recent numbers ...

If things keep up like this, it probably won't matter much who the GOP chooses to run against him or how much money the president raises. All the cash in the world, and all the smearing of your opponent possible will not alter the perception of the total, catastrophic failure of Obama's presidency.

Pethokoukis concludes:

Goldman Sachs doesn't have to tell you things are bad. I don't have to tell you things are bad. Everybody knows things are bad. Unemployment is at 9.2 percent (11.4 percent if the official labor force hadn't collapsed since 2008 and 16.2 percent if you include discouraged and underemployed workers.) Moreover, the economy grew at just 1.9 percent in the first quarter of this year and may have grown less than 2 percent in the second. Wages and income are going nowhere fast.

When will the White House signal a change of economic direction? Will cutting tax rates and regulation ever make it on the agenda? That may be the only way Obama can win another term. And time is running short.

Obama is ideologically incapable of changing course. He is so committed to his far left agenda that he would rather go down to defeat in a landslide than alter his policies.

That may be a winner for the GOP. But in the end, the US people and economy loses because Obama's ineptitude will have dug a huge hole for the next president to climb out of.