Page 24 - Accelerating out of the Great Recession

CHAPTER 1

THE DAMAGED

ECONOMY

It is tempting to say that the crisis is over. The “Great
Recession,” as it is being called, did not turn into a second Great
Depression. Unprecedented intervention by central banks and
governments averted worldwide economic catastrophe.
And signs of stabilization have appeared: optimistic experts
increasingly outnumber pessimistic experts, the slump has bot-
tomed out, and pockets of growth have emerged.
So why not declare an end to this gloomy chapter and get
back to normal?
Because, unfortunately, the fundamental problems of the world
economy have not yet been resolved. The dependence on heavy-
spending consumers (particularly U.S. consumers) remains; many
important banks are still weak, and it will take years before they
return to full health; and the economic scoreboard shows a drop in
economic activity not seen since World War II.

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