United States Economy

In 2007, the American economy began to slow significantly, mostly because of a real-estate slump and related financial problems. In December 2007, the economy entered a recession, according to a committee of academic economists.

The economy was last in recession in 2001. Contrary to widespread belief, the terrorist attacks of 2001 did not cause the downturn that year. The economy slowed as the dot-com bubble started leaking in early 2000 and began to shrink in early 2001. The recession ended in

November 2001.

Yet there are also now increasing worries that a boom in consumer spending, helped along by more consumer debt, played a large role in lifting economic growth over the last generation.

If this is the case and if the end of the debt boom leads to slower consumer spending, as seems to be happening, economic growth may slow significantly in coming years, even after the recession ends.

I have to be honest, these last sentences worries me a lot. Economic growth that’s payed by loans that people can’t repay... . It reminds me of The Great Depression in the early thirties. People bought there radios, fridges and cars by loaning money. Of course it isn’t a problem as long as there is a steady growth, but it is a complete other story when recession is around the corner.

And this is not only of cencern for the United States.
The United States produced roughly $15 trillion worth of goods and services in 2008, making it easily the largest in the world. China is next, at about $12 trillion. So these problems concern the whole world. From the United States to China and Japan to Europe and even Russia.

Source: An article by David leonhardt, Jan. 8,2009 on http://topics.nytimes.com/topics/reference/timestopics/subjects/u/united_states_economy/index.html

Blog written by De Clercq Stijn