Spring Break
Moody's experts talk recession
Joshua Kurtz
Issue date: 5/29/09 Section: News
|
In this baseline scenario, Zandi said the recession is predicted to end in October 2009, and unemployment is forecasted to begin falling after reaching a peak of 9.8 percent in the spring of 2010. The unemployment rate often does not begin to drop until after the end of a recession.
Zandi also cautioned that the economic recovery could be slower than that of previous recessions, in part because, "It's going to be quite some time before credit flows freely again," he said.
Andrew Walsh, a sophomore majoring in business administration, said the recovery aspect is important because going forward people are going to need to know what to do.
Zandi said government policy responses could determine whether the economy follows the baseline scenario. He also supports the stimulus package recently passed by Congress, although he believes the stimulus would be more effective had it been larger. Zandi is in favor of President Barack Obama's focus on healthcare, education and energy, calling the president's plans "very laudable."
Despite his approval of Obama's ideas, Zandi said the president's budget does not address the United States' long run fiscal situation enough and believes it is very important that the government have a credible plan to pay for their initiatives.
Zandi spoke highly of the role the United States' central bank, the Federal Reserve, has played in attempting to steady the economy, saying Federal Reserve Chairman Ben Bernanke has "done a marvelous job."
Zandi said the possibility of inflation occurring due to the Fed's spending policies is only "a small concern," and that he would be surprised if Bernanke is not given another term as federal chairman.
Global cooperation has also helped lessen the magnitude of the recession.
"[International cooperation is] fundamentally the key reason why this is a recession and not a depression," Zandi said.
Zandi said college students could have opportunities in the current economic environment.
"My advice would be to stay in school if you can," said Zandi.
If students do enter the workforce, some people are hiring. Industries including healthcare, education, utilities and government are adding jobs despite the overall economic situation, he said.
Be the first to comment on this story