Mr. Shaman
Senior Member
- May 4, 2010
- 23,892
- 822
- 48
"Using econometric models, Alan Blinder and Mark Zandi argue that the bailouts, the stimulus and other extraordinary actions saved America from nothing less than another Great Depression. Blinder was vice chairman of the Federal Reserve. Zandi is chief economist at Moody's Analytics and advised Republican presidential candidate John McCain.
Had Washington not taken any aggressive steps starting in 2008, the results would have been horrific, their study says. Real gross domestic product would have fallen a "stunning" 12 percent, rather than the actual decline of 4 percent. Nearly 17 million jobs would have vanished, twice as many as the real count. And the unemployment rate would have peaked at 16.5 percent.
Such contenders often cite Barack Obama's projection (they use the word "promise") that unemployment would level off at 8.5 percent once Congress passed his stimulus plan. With joblessness now at 9.5 percent, Obama clearly underestimated the challenge, but that's still a whole lot better than 16.5 percent.
Add outright deflation to the expected massive unemployment and falling GDP, Blinder and Zandi conclude, and "this dark scenario constitutes a 1930s-like depression."
Happily, government stepped in, and America bucked a catastrophe. How fortunate for us all that the Tea Party wasn't running Washington."