By June of 2009, the United States successfully pulled its way out of what experts call the worst economic crisis since the Great Depression. The experts called this economic downturn the Great Recession, and it technically began in December 2007 and lasted for two years, however, the ramifications were felt far beyond those two years.
The economic situation began to improve slowly after multiple stimulus packages and government initiatives to stimulate and support economic growth.
Since this unprecedented downturn in the economy, the United States has enjoyed over 100 straight months of economic growth and many experts feel a decline is inevitable. Many financial experts are convinced that the United States economy is headed towards another recession.
The unemployment rate has fallen to four percent since its peak at nearly ten percent during the Great Recession, and there has been a relentless bull market on the New York Stock Exchange.
Most economic experts agree on the fact the modern economies behave cyclically and there must be corrections on the horizon. Experts warn that focusing on the positive factors or economic growth and the low unemployment rate can give a false sense of security, without considering the past behavior of economies in the past. Read more: US Money Reserve | Manta and US Money Reserve | BizJournals
The experts fear that this constant economic growth is a strong indication we may be on the cusp of another financial bubble. Experts agree recessions are an essential aspect of a healthy economy as it allows the natural economic cycle to take place.
Economic history tells us, as an economy grows and wages increase, the private sectors slow hiring which leads to the Federal Reserve raising interest rates to slow the economy down purposely. These chains of events lead to fewer profits from businesses which trickles down to the stock market.
Politicians never want the economy to take a downturn during their watch, so it is like adding fuel to the fire. Experts fear the government is purposefully stopping the natural pull-back of the economic growth which is creating a bubble. Recessions are okay if they allow the economy to happen naturally, but prolonging the inevitable creates a financial disaster far worse.
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