Posted on 07/28/2010 11:38:42 AM PDT by Oldeconomybuyer
An in-depth modelling exercise by Moody's chief economist, Mark Zandi, and a Princeton University expert, Alan Blinder, paints a bleak scenario of a 1930s-style Great Depression if the US government had enacted none of its $1.7 trillion programmes to avert a financial meltdown.
Using historical statistical relationships and a focus on the government's impact on narrowing credit spreads, the pair found that the downturn would have continued into 2011, with unemployment peaking at 16.5% rather than last year's actual high of 10.1%.
They believe US gross domestic product would have slumped by 7.4% in 2009 and by 3.7% in 2010, producing a "peak to trough" decline of 12%, rather than the anticipated 4%. Starved of demand, shops and employers would be cutting prices and wages.
"With outright deflation in prices and wages in 2009 to 2011, this dark scenario constitutes a 1930s-like depression," says the study, entitled How the great recession was brought to an end".
Zandi and Blinder say that although economic activity and job creation remain extremely sluggish, the US economy has made "enormous progress" since its nadir last year: "Maybe the country and the world were just lucky. But we take another view: the great recession gave way to recovery as quickly as it did largely because of the unprecedented responses by monetary and fiscal policymakers."
(Excerpt) Read more at guardian.co.uk ...
HaHa ... most of the world did not participate in FDR’s depression ... Odd that. And I wonder where all the Obama wealth transfer comes in? Yes you can lie to Kenyans, but not Americans.
Just imagine if the liberals with their CRA 1977 and their pursuit of the mythical redlining unicorn never happened. Seems like all we have proved is people who can’t afford homes still can’t afford homes.
Prevented, or just delayed?
But they acted quickly and the economy responded as intended. Whew!
We are in a depression and this author is a ****ing LIAR!
LLS
Does this clown REALLY think that you can borrow and spend your way into wealth?
Anyhting coming from academia with even a remotely possible connection to politics is suspect. You can’t accept anything from a U.S. college campus on its face without thoroughly vetting the authors. Unfortunately, political activism has decimated the credibility of many once reliable institutions.
Now we are getting economic advise from a Commie newspaper? Shoosh, how come these commies were never able to make their system work, but are smart enough to know what a running dog capitalist system should do? Inquiring minds and all.
Blinder, Alan S.
PRINCETON, NJ
08540 Princeton University/professor $500 10/20/2008 G JUDY FEDER FOR CONGRESS - Democrat
Blinder, Alan S.
PRINCETON, NJ
08540 Princeton University/Professor $1,000 05/07/2008 P JUDY FEDER FOR CONGRESS - Democrat
Zandi, Mark
MALVERN, PA
19355 Moody’s/Economist $2,300 06/23/2008 G BOB ROGGIO FOR CONGRESS COMMITTEE, THE - Democrat
ZANDI, MARK M. MR.
MALVERN, PA
19355 MOODY’S ECONOMY.COM $2,300 04/18/2008 G MCCAIN-PALIN COMPLIANCE FUND INC. - Republican
ZANDI, MARK M. MR.
MALVERN, PA
19355 MOODY’S ECONOMY.COM/ECONOMIST $2,300 04/18/2008 P JOHN MCCAIN 2008 INC. - Republican
ZANDI, MARK M. MR.
MALVERN, PA
19355 MOODY’S ECONOMY.COM/ECONOMIST $-2,300 04/18/2008 P JOHN MCCAIN 2008 INC. - Republican
ZANDI, MARK
MALVERN, PA
19355 $-2,300 03/31/2008 G JOHN MCCAIN 2008 INC. - Republican
ZANDI, MARK MR.
MALVERN, PA
19355 MOODY’S ECONOMY.COM/ECONOMIST $-2,300 07/27/2007 P JOHN MCCAIN 2008 INC. - Republican
ZANDI, MARK MR.
MALVERN, PA
19355 MOODY’S ECONOMY.COM/ECONOMIST $2,300 07/27/2007 G JOHN MCCAIN 2008 INC. - Republican
Zandi, Mark M
MALVERN, PA
19355 Moody’s Economy.com/Chief Economist $2,300 06/26/2007 G SESTAK FOR CONGRESS - Democrat
Zandi, Mark M
MALVERN, PA
19355 Moody’s Economy.com/Chief Economist $2,300 06/24/2007 P SESTAK FOR CONGRESS - Democrat
ZANDI, MARK MR.
MALVERN, PA
19355 MOODY’S ECONOMY.COM/ECONOMIST $4,600 05/29/2007 P JOHN MCCAIN 2008 INC. - Republican
Prevented, or just delayed?
Ensured.
Another unbiased academic. /sarcasm
Yep. Destroying the economy saved the economy.
Concur.
I estimate that unemployment would currently be at, or under, 6% if the Government had cut taxes on business $787 billion instead of passing the "Stimulus" spending package and there is MORE empirical data to support my estimate then there is to support THEIR assumptions
“With outright deflation in prices and wages in 2009 to 2011, this dark scenario constitutes a 1930s-like depression,”
That right there tells us which camp these meatheads are in. They’re making the same mistake Hoover made, believing that high prices and wages are a cause of prosperity, rather than an effect.
It is becoming more widely understood that TARP, indeed, DID stop a depression as it was used to bolster the supply-side. And TARP has mostly been paid back by the banks.
Because TARP is being understood as averting a depression, the liars are trying to claim the same for the Porkulus (that went to the demand side).
These people have zero shame. But we knew that.
The study’s authors are likely to have their findings hotly disputed by Republicans, who maintain that an unemployment rate stubbornly close to 10% means the government's interventions were a failure, fuelling an out-of-control budget deficit.....”Simply borrowing money from our grandchildren to send down to state governments is not going to jump start the economy,” McConnell told a newspaper in his home state of Kentucky. “The biggest way for the economy to recover is for the private sector to grow”
Well let's all party. How does all that debt get reduced with high unemployment, expanded government benefits and entitlements, more and bigger federal government? Reminds me of the $44,000 GM government motors electric car and those 300K green jobs in Detroit funded by taxpayers.
I love the searchable database at FEC.gov
Fixed it for you
Oops! Wait, I guess it's getting worse.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.