| steven787 said: Recessions(after 1970) last how long? 6-12 months? Even if this one last double, which it won't, the last two years of the term will see more jobs and massive growth. |
A large part of the reason why we're facing the (potential) collapse of the worldwide banking system is that we have not allowed recessions to run their course ...
Trying to prevent a recession is a lot like trying to prevent a forest fire. It sounds like a good idea to prevent a forest fire because it is highly destructive force that has the potential to cause unnecessary suffering to individuals. What ends up happening when you are "Successful" at preventing a forest fire is you keep diseased trees alive which prevents young and healthy trees from growing, the soil slowly "loses" nutrients because they're not being returned from the trees, and you just see a build up of dry underbrush which just adds risk of a larger, more destructive and out of control forest fire from happening.
Had the Federal Reserve not flooded the market with money after the collapse of the Dot-Com bubble, or the 9/11 attacks, it is likely that those recessions would have been somewhat longer and somewhat more difficult for people; at the same time it is likely that home prices would have stagnated (or dropped) in many housing markets for long enough that people would have realised the foolishness of the sub-prime mortgages, and the bubble would not have grown so large as to risk the world ecconomy when it popped.
