How the Great Recession is Different Than Other Recessions

The Great Recession Hits American
       Wall Street wrecked the economy with the proverbial stuff hitting the fan in the last couple of years of the Bush administration. This is a direct result of deregulation lobbied for during the 1990s and 2000s. This complete melt down of our banking, housing and in the general economy has resulted in the loss of 20% of the national net worth, resulted in 15 million American families being under water with their mortgages, a few million more having completely lost their homes, 24 million Americans unable to find full time work even though the want it and need it. Additionally, there are 50 million Americans without any health insurance, tens of millions more without adequate health insurance (insurance that would result in the bankruptcy of the insured if catastrophic medical situations arise), and 47 million Americans on government food assistance. Let us not leave the 11 million underemployed Americans out in the cold either.

What Makes This Recession Different From Past Recessions?
        In past recessions, the economy slows down and many businesses lay off workings as a result. The job losses generally aren't localized but rather are scattered across many businesses throughout the economy. When the economy improves and business picks up, workers are hired to handle the additional demand. The job loss is temporary. This is what normally happens during a recession.
       Normally, banks loan each other huge short term loans. Normally banks make short term loans to businesses as well so business can make payroll, pay for raw materials or cover temporary cash flow shortages. These short term lines of credit keep the economic engine of America (and the world) chugging along just fine.        That is not what has happened this time.What happened this time is something different all together. This time, the banks freaked out - they realized that they had created trillions in toxic assets, that other banks had done the same. They realized that at any time, any bank, big or small, could go under. In fact, the larger the bank, the more likely they were to go under. So that short term credit froze up.
       As a result, many businesses went out of business, they went bankrupt. They couldn't make payroll - oh, they were fine, healthy, productive companies - they just lost the ability to cover their short term debt obligations due to the banks freezing up. Rather than generalized, shallow, temporary layoffs, we had permanent, localized layoffs. The jobs lost when credit froze up aren't coming back. This is why we were told at the time that the recovery would be a jobless recovery, remember? This is why unemployment hangs tough at around 9%.



Cutting Taxes For The Rich - Did/Does This Really Result In More Jobs?
If it does, lets do it again, if not, lets let the tax cuts expire, fair enough?

       When the Tax Relief & Reconciliation Act of 2001 (commonly called "The Bush Tax Cuts") was passed, unemployment was at 4.5%. If, indeed, cutting taxes for the rich results in job creation as has been claimed, one could expect to see an decrease in unemployment as a result. What happens instead is that unemployment goes up from 4.5% to 6.0% by 2003. The government's response was to cut taxes even more with the Jobs and Growth Tax Relief Reconciliation Act of 2003. This further reduced taxes on the wealthy. Okay, if the theory that cutting taxes on the wealthy results in job creation is reality, then joblessness in America should be seen as going down from 2003 on. Take a look at the raw numbers, the actual unemployment rate here and judge for yourself.

The Bush Tax Cuts put a trillion dollars into the pockets of wealthy Americans between 2001 and 2011. Can you say the changes in unemployment justify continuing the Bush Tax Cuts?