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Could we be facing another Great Depression?

March 5, 2009 by  

The economy needs to turn around fastInternational economists are warning that unless the U.S. economy sees signs of a turnaround in the near future, the country could be headed for a deeper recession – or even a depression.

The IMF’s top economist, Olivier Blanchard, told French newspaper Le Monde that the next few months are likely to be "very bad."

"It is imperative to stifle this loss of confidence, to restart household consumption, if we want to prevent this recession developing into a Great Depression," he said, according to Agence France Presse.

His comments come after the U.S. government announced that the country’s economy contracted by 0.5 percent in the third quarter.

If the GDP contracts during the fourth quarter as well, it will embody the traditional definition of a recession – two consecutive quarters of negative growth. There is little doubt that this criteria will be met.

During the third quarter of 2008, personal consumption fell by 3.8 percent, while exports and imports stalled and the construction industry suffered losses.

Gross domestic purchases, which reflect purchases made by Americans for all goods and services regardless of where they were made, also decreased by 1.5 percent, according to the US Bureau of Economic Analysis.

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  • Mark

    Where was Bush?
    Why didn’t the Bush White House and the 1994-2006 republican congress takes steps to avert the economic disaster?

    Mistakes were made….

    • Marisol sanchez

      I don’t think anyone new or even understood how bad it really was. But let’s face it. Barney Frank was in charge of Fannie Mae, what the hell was he doing. Obviously, he was not doing his job. He made it way to easy for anybody with a pulse to buy a home. John McCain tried to investigate what was going on, but the democrats stopped him, and made it look like everything was o.k., and that’s where the problem started.

  • Mark

    Marisol, its just not so simple.
    Both parties shared a similar goal of affordable housing for minorities. They accomplished this by lowering the bar, paving the way for bad loans. The housing disaster started with HUD in the early 1990′s. Barney Frank is an idiot, and should have been exposed long before now. When I lived in Washington in the early 1990′s, Barney Frank was caught running a personal ad to gay men. He called himself, “Hot Bottom” that should have been the last time we ever heard from this public servant. Unfortunatly it wasn’t. And he’s got the whole housing market strapped to a barrel, prison style…

    Anyway, this is what President Bush had to say reguarding affordable housing.

    President Bush said in a statement, Jackson {Alphonso Jackson, a bush appointee} “made significant progress in transforming public housing, revitalizing and modernizing the Federal Housing Administration, increasing affordable housing, rebuilding the Gulf Coast, decreasing homelessness, and increasing minority homeownership.”

    The republicans did nothing, because like the democrats, they just didn’t get it. The writing was on the wall for years for those who cared to see it. And I am glad to say, we never got caught up in the insane housing boom. We built our own.

  • Donaldray

    PLEASE DO NOT WORRY WE HAVE COMPLETE CONTROL OVER YOUR COMPUTER. For the next micro second we control bit flow. We control image on the screen. We control the union between the circuits. As obama turns up the heat slowly on the economic plan, the American frogs inside will not jump and it will be some time before the American frogs die. The Bush years were the good old day, the worst is yet to come.


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