I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
$8.5 trillion makes it a ‘Great Recession’ instead of a Great Depression
The total infusion of federal money to rescue our economy so far totals more than the annual gross domestic product of every national economy in the world except the United States, the European Union and China. According to the New Mexico Business Weekly, it’s about $8.5 trillion:
Federal bailouts, equity buys into banks and investment houses, liquidity infusions by the U.S. Federal Reserve Bank, loan guarantees and economic stimulus checks now total $8.5 trillion, according to various estimates.
This includes the federal takeover of mortgage lenders Fannie Mae and Freddie Mac, plus the bailouts of American Insurance Group and Citigroup.
The Business Weekly says the total is about 60 percent of our GDP, which will come in around $14 trillion.
Gross domestic product, by the way, is basically a measure of what our economy as a whole produces. To be a healthy economy, we generally want to see it growing. When economists say we’re in a recession, they mean that the GDP is contracting.
If 60 percent of our GDP is essentially federal dollars injected into the economy, this means that our GDP was basically about to collapse.
The big question is whether or not more is needed. Democrats seem to think so, with Senate Majority Leader Harry Reid indicating an economic stimulus package will be sent to the White House as soon as Barack Obama is inaugurated as president. A figure being kicked around is $500 billion.
The silver lining? It’s a “recession,” not a “depression,” even if some have gone so far as dubbing it the “great recession.”