Obama and the recession
In 1987 we had a normal recession. It cooled the economy, wages and price were kept in check and we were reminded that we should watch our credit card spending. In 2001 we were due for our next recession. The Stock market had peaked and was starting to decline. 9/11/01 devastation struck in New York. An unprecedented attack on our own soil. Although the financial markets collapsed we as Americans pulled together and helped each other. In a way we were at war and we were not going to let the terrorist cripple our country. The government acted quickly and did what ever it took to save the economy.
We drove around with American flags on our cars. We pulled together and helped support the U.S. The recession was over in 18 months and a lot of people didn’t even know we had a recession.
For the financial health of the country missing the recession has caused us problems now.
Like the forest in Yosemite National Park, the forestry service found that by not letting natural forest fires burn it actually caused a condition were a catastrophic fire could happen. Below is some copy from NPS.gov.
One of the reasons we are in a large recession is because the last recession did not burn through. It was extinguish quickly before it grew. We now are going to have two recessions in one.
The good news is the President Elect Obama understands the seriousness of this recession. He understands that this has the makings of the biggest rescission since the Great Depression. He is not waiting for the fire to be so devastating we can not recover.
During the Great Depression the government did many things to try to stimulate the economy but they were also trying to balance the budget. What happened is they did not inject enough money into the system and did not spend enough on infrastructure.
Similar to now the whole world was suffering.
Japan’s government used the approach of creating jobs for their people. They put people to work instead of just giving them hand outs. They built roads, bridges, schools, hospitals and even had some people paint walls just to keep them busy. The country benefited by the infrastructure improvements while stimulating the economy. In that decade the relatively small country of Japan became as wealthy or more wealthy then the United States. Because of their superior wealth and power they thought they may be able to over power the United States. It was that attempt that finally got the United States to start spending money on itself. The War effort created millions of jobs and we were finally out of the depression.
The point is, we need to take this recession seriously and as hard as it is to swallow we can not worry about the budget. I know no one wants to spend money when times are thought but if the government waits until we have the money then what’s the point. We need jobs when the economy is bad not when we are already prosperous.
Even with maximum effort from the government we will still cool the economy more than enough. With out maximum effort we will suffer like we have not seen in our lifetimes.