Monday, December 8, 2008

Why a depression is very unlikely

Although it does appear that a depression is technically possible, I believe that it is very unlikely for the simple reason that there are still too many people around (including Bernanke) who know a lot about the last depression and its causes and they are committed to pumping enough stimulus into the financial system and the economy to avoid a recurrence.

It is still possible that a divided Congress could produce a flawed sequence of stimulus packages, but it is much more likely that they will make enough of the right moves to avert a depression, especially since the Democrats have already indicated a propensity to ramp up spending.

-- Jack Krupansky


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