Time to wake up to the recession

"The most wrenching recession since the 1930s ended a year ago," say the editors of The Economist, but the end of the recovery is nowhere in sight. Recessions are an unavoidable part of the business cycle, and the economy typically bounces back pretty quickly. This downturn, however, was caused by a massive financial crisis, and recoveries in such cases are "weak and slow" — typically taking seven years — "as banking systems are repaired and balance-sheets rebuilt." The government can speed up the process, spending now to boost the economy, while committing itself to paying the bills as soon as possible. Unfortunately, politicians seem more interested in playing the "blame game" than in getting us out of this mess, with the GOP pinning the country's problems on President Obama's "big government" spending, and Democrats insisting "Wall Street’s excesses caused the problem and higher taxes on high-earners are part of the solution." Here, an excerpt:

America's biggest problem is that its politicians have yet to acknowledge that the economy is in for such a long, slow haul, let alone prepare for the consequences. A few brave officials are beginning to sound warnings that the jobless rate is likely to "stay high." But the political debate is more about assigning blame for the recession than about suggesting imaginative ways to give more oomph to the recovery....

Americans are used to great distances. The sooner they, and their politicians, accept that the road to recovery will be a long one, the faster they will get there.

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Read the full article at The Economist.