How quickly would the economy recover?
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Sunday, February 1, 2009
7. Even if a stimulus plan were to succeed, many economists say the nation is in for a long period of higher-than-usual unemployment and weaker-than-usual economic growth. Last year alone, the unemployment rate jumped 2.3 percentage points. The Obama administration's own projections say that the unemployment rate will not return to early-2008 levels before 2012. The reality is that the nation is recovering from the explosion of a housing bubble that has left the financial system teetering. In the process, a huge amount of personal wealth has evaporated, causing people to cut back their spending and bolster their savings, placing a drag on economic growth. A stimulus package would cushion -- not reverse -- the impact of those fundamental shifts.
