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Wednesday, January 27, 2010

Recessions Can Come Back to Haunt You

From Jeanne Sahadi at CNNMoney: Ghosts of recessions past

Some economists advise lawmakers to do more -- now. Others say that is exactly the wrong way to go.

"The patient is still out of surgery. But it's still in ICU and needs treatment," said William Gale, co-director of the Tax Policy Center.

Those pushing for more stimulus, like Nobel Prize-winning economists Paul Krigman, say policymakers should not make the same mistake as their 1930s predecessors" prematurely packing up their stimulus marbles and going home because they wrongly assumed the economy was out of the woods.

"We're going to experience another recession sooner than anyone thinks. And it's likely to be before the economy has healed," Achuthan said.

When it comes to doing more, you also need to know when to quit. But I don't think we're at the step on the brakes point. The Federal Reserve announced today they are leaving the key interest rate alone. That means we still have time to heal. You can read more about this from MSNBC: Fed leaves key interest rate unchanged.



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