Economic Déjà vu

Abstract

The recent recession that swept through this and many countries worldwide had many causes, one of which was low interest rates in the United States. Loose monetary policy pursued by former Chairman of the Federal Reserve Alan Greenspan was a major component of the housing crash and following recession. Furthermore, the Fed’s current monetary policy is extremely similar to policy pursued before the 2008 recession. The current system of monetary policy implemented in the U.S., necessitating that credit and debt expand forever, is a dangerous and potentially disastrous policy to be pursuing. Unless a change takes place, the American economy could experience another — and possibly worse — recession in the near future.