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Most of America's went for banker bailouts, tax cuts for corporate favorites and super-rich elites, as well as quantitative easing money creation for speculation, not economic growth.
In contrast to recessions lasting six to 18 months, depressions last years.
From 2002 - 2007, America's economy was massively manipulated and levered. As a result, financial activities comprised 40% of profits. At the same time, household debt to income and assets "surged to unprecedented levels and the personal savings rate" was negative when the housing bubble peaked.
As a result, America experience levered prosperity. Conditions are now reverting to the mean. A long way down remains.
Since fall 2007, GDP, production, real income, and other major economic indicators never recovered to previous cycle highs. In normal times, post-recession tops are achieved and surpassed in a year or less.
Not now. Home sales are 22% lower than in late 2009. Employment growth, in fact, has been stagnant for over a decade. The S&P 500 is no better than in spring 1998. In terms of job creation (what matters most on Main Street) and equity appreciation, America's had a lost decade well into another one.
Recessions usually reflect inventory cycles. Traditional monetary and fiscal stimulus reignites demand.
In contrast, "balance sheet compression and deleveraging" characterize depressions, including debt reduction, asset liquidation, and rising savings as consumers hunker down in hard times.
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