Now that the federal government has embarked on a $700 billion rescue plan and the Federal Reserve has undertaken massive and sometimes unprecedented maneuvers to ease credit, it's natural to wonder whether any of their efforts are having the intended effects. Economists, who still argue over what caused the Great Depression, say it's far too early to tell. What is clear is that key financial indicators of the credit crisis sometimes jump or dive depending on the government's actions.Some indicators, such as those measuring the short-term corporate loans that are the oil in the economic machinery, have shown improvement. More money is flowing, and at lower interest rates.Other indicators, such as mortgage rates, have risen and fallen, but remain essentially the same as they were in the summer. Regulators had hoped to lower rates in order to revive the housing market.As for broader measures, the Dow Jones Industrial Average remains about 35 percent below its peak in Oct. 2007.But perhaps worse is that many economists believe the United States is slipping into a recession, some say a severe one. If so, that means that the statistics reflecting what most people are experiencing - unemployment, real incomes, etc. - are destined to get worse.
The Washington Post - Octber 31, 2008
In Tightfisted Turn, Economy Contracts Article | Through recession, countless natural disasters and a major terrorist attack, there has been one constant in the U.S. economy: American consumers have bought more stuff in any given quarter than they did in the previous one.