Friday, January 10, 2014

Recession

We hear almost daily that the recent recession was the worst economy since the great depression and we just assume that is true but I am not so sure. In the recession of 1980-82 we had a high of 10.8% unemployment, 13% inflation and 21% prime interest rates. In this recent recession we did reach 10% unemployment but inflation is less than 2% and the prime rate is .25%. In the earlier recession we recovered within a couple of years. The fed has pumped 4 trillion into the system which they could not due if we had 13% inflation. Can you see the government paying 20% interest on the money they borrowed fighting this recession.

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