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Depression will last for years, says Federal Reserve

Buried in the minutes of the last meeting of the Federal Reserve was this warning: “All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation.”

Paul Krugman wrote, “…The Obama administration is taking action to help the economy, but it’s trying to mitigate the slump, not end it. The stimulus bill, on the administration’s own estimates, will limit the rise in unemployment but fall far short of restoring full employment. The housing plan announced this week…will help many homeowners, but it won’t spur a new housing boom.”

It seems we are in for a long, excruciating slog and there is nothing the government can do to bring a quick stop, much less a turnaround to the downward economic spiral.

The best President Obama can do is help soften the crash and mitigate some of the suffering. It is so distressing that the Republican Party has dug in its heels and proffers a failed ideology: more of the same old Bush policy. They have no answers and they say take no action. It seems as if they have a death wish, both for their party and for our country.

Joe Howard Crews

 

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