Fast or slow recovery executive summary

College The economy of United s is trying to pull out of its longest recession. Different economist predicts different outcomes, some expect strong recovery, others expect a sustained but gentle recovery, while some predicts that it will be a fleeting rebound followed by a second slump (Reddy. 2009). Economists who are trying to predict the rate of recovery look at the similarities it has with other previous recession. It relates it with the recession of 1970s and 80s which was followed by a sharp recovery. In relation to 1980 recession, the economy recovered but it also collapsed after one year. Like wise to the economies of 1940s and 50s, the recovery was also followed by recession in 3 years. The new slump came as a result of fiscal stimulus plan from the government, but the consumers will see less sense due to less borrowing power to carry out spending. With consumers being cautious on spending, the economy will lack the main driving force to push it ahead hence collapsing again.
The journalist is discussing the theories of a sharp rebound after a steep drop, a short rebound followed by a recession again and how anxiety keeps growth slow. In a sharp rebound after a steep drop, employers normally cut their payrolls and output so as to protect the company while customers delay majority of their purchases, when the growth return it will shoot up due to fierce expansion. In a short rebound followed by a recession again, the economy is build by fiscal stimulus program. Due to consumers who are unwilling to spend, the economy will go down once more due to lack of major driving force. The journalist assumes that the audiences are well educated and understand the present and past economic situation of the country. The author’s evidence is based on past economic events and comparing and contrasting them with the current situation.
Sudeep Reddy. 2009. Wall Street Journal. P. 13