Recessions

It is said that if a lie is told often enough it becomes the truth. Over the past ten years the recession of 2008 was presented as the worse recession since the great depression but that may not be the case. When compared to the recession of 1982 it doesn't look quite so bad. Early in Reagan's first term the country went into a tail spin. Unemployment soared to 10.5% and the housing sales and prices collapsed. Inflation rose to 13% while interest rates hit 21%. No one could afford to borrow money so business suffered and retail sales fell. The recession that hit early in Obama's first term did have 10.5% unemployment but interest rates were kept below one percent as was inflation. In both cases the GDP went into negative territory but in the Reagan recession the GDP recovered in two years and averaged 5% for Reagan's second term. In the Obama recession the GDP averaged only 2% during his second term and thus was a very slow recovery. The spending programs put in place to hold interest rates down caused economic turmoil for which we are still paying the price. In the 80's Reagan cut the top tax rate from 70% to 28% and spurred a recovery that lasted for 20 years but government spending in the Obama years may have saved the country from going deeper into recession but the price was a repayment program which will be with us for years.