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Recession?
This makes no sense.
Fed chairman Ben Bernanke tells Congress today that it risks a recession, with higher unemployment and increased home foreclosures, if lawmakers fail to pass the Bush administration's $700 billion plan to bail out the financial industry.
Here's my problem. It has been sold as preventing another depression. If its going to be a recession, well, we haven't had this kind of massive bailout in dealing with any of the previous post World War Two recessions.
We're in a recession, and its going to get worse. No way the bailout stops that.
What is Bernanke up to?
About the author
Christopher Farrell is economics editor of Marketplace Money, a nationally syndicated one-hour weekly personal finance show produced by American Public Media.
Chris, I can't answer your question, but seeing Bernanke and Paulson testifying before Congress did not make me feel less concerned. They seemed very arrogant. Is Paulson still tied to Goldman Sachs in any way? ( as in a Cheney-Halliburton type of deferred compensation program )
I'm confused about how the GDP figure is calculated. Do they factor in the money borrowed by the government and pumped into the economy?
What I mean is, if the government was not running a massive budget deficit, would we be in a "technical" recession? Logically it seems that if we're clocking 2% GDP growth, but running a 3% budget deficit, GDP growth is actually negative.
Thanks for all your posts over the past couple weeks, it's nice to have a voice of reason out there...
