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Did we avoid a second depression?

In a new paper, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration’s fiscal stimulus program, the nation’s gross domestic product would be about 6.5 percent lower this year.

In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation.

The paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody’s Analytics, represents a first stab at comprehensively estimating the effects of the economic policy responses of the last few years.

“While the effectiveness of any individual element certainly can be debated, there is little doubt that in total, the policy response was highly effective,” they write.


Asked by sweet-a-kins at 8:43 AM on Jul. 29, 2010 in Politics & Current Events

Level 34 (67,502 Credits)
This question is closed.
Answers (26)
  • That was a surprisingly balanced article for the NYT.

    I tend to agree with the second economist.

    Answer by lovinangels at 12:38 PM on Jul. 29, 2010

  • Ummmm....Obama's economic plans have done NOTHING!! All of Congresses spending is INCLUDED in the GDP--propping it up, and making it SEEM as though things are "rosy!" If you were to ELIMINATE the spending portion that's been included in the GDP, then the man behind the curtain will be revealed! Meaning the state of our economic woes will be seen, and it ain't pretty!!!

    At some point, we're not going to be able to continue to fund the GDP with additional spending (China is going to start collecting on all of those "IOU's" and THEN the sh*t is going to hit the fan!

    We haven't avoided or gotten ourselves out of anything...our government is trying to stave off the inevitable!!

    Answer by LoriKeet at 8:59 AM on Jul. 29, 2010

  • rolling on floor



    Oh wait, was this supposed to be a serious article.....I thought it was a joke.

    You can always find a leading (insert expert) to report whatever you want reported...think Climategate....  That doesn't make it true.  Any idiot that has taken Economics 101 knows you can't spend what you don't have and the only way you can "spend money to make money" is if you have money to INVEST in something.


    Answer by yourspecialkid at 10:44 AM on Jul. 29, 2010

  • well considering how few in comparison are literally starving to death and living on the streets compared to the Great Depression. i would say yes we avoided it. there are a lot more resources for people now than tthere were then. thankfully. but many good families have ended up homeless. but if our government keeps putting bandaids on heart bleeders america is gonna end up a lot worse than any of us can imagine

    Answer by sati769leigh at 8:51 AM on Jul. 29, 2010

  • This is not over yet. The so-called recovery is not actually happening in grassroots America. To the contrary, folks are still losing jobs and things are still going downhill in the private sector. Only the government is "seeing" a recovery.

    Answer by NannyB. at 9:01 AM on Jul. 29, 2010

  • LoriKeet has said it all, nothing left for me to add.

    Thank you LoriKeet.   LOL


    Answer by Natesmom507 at 9:58 AM on Jul. 29, 2010

  • UGH!! I CAN'T believe that Obama is speaking RIGHT NOW, and saying that what he did economically was "right" and even though "not popular" that our country is in recovery mode....and the crowd is CHEERING?!?!?

    throwing up


    Answer by LoriKeet at 10:13 AM on Jul. 29, 2010

  • About the only thing left for me to say is, that I agree with Lorikeet and yourspecial.

    Answer by Carpy at 10:46 AM on Jul. 29, 2010

  • I am not one to count my chickens before they hatch. I don't think we have seen the worst of things to come, so I naturally would have to disagree that we have avoided anything.


    Answer by QuinnMae at 11:31 AM on Jul. 29, 2010

  • Oh, and if 10% unemployment and trillions of dollars of debt is the CHANGE so many were HOPING for, then you got what you wanted!  Happy now?! *sigh*



    Answer by LoriKeet at 9:20 AM on Jul. 29, 2010