Question

Recovery from the 2008-2009 recession was agonizingly slow. what factors might have constrained faster growth?

Answer 1

Recovery from the 2008-2009 recession was agonizingly slow due to the following factors:


1. The recession had an impact on most of the industrialized West, not only the United States. As the recession spread to Europe, the United States's biggest market, it had a 360 degree impact on America's exports as well.


2. The US was spending a lot on the Iraq and Afghanistan wars. While this was theoretically supporting millions of jobs in the war industry, for the average person, there was no benefit. Billions that could have been used to help people, were used elsewhere.

3. Rising debt was also a problem. The recession opened up the hidden truth behind America's prosperity, the debt problem. Most people and institutions were spending war more than what they had and when the debt started to mount up, there was very little flexibility left.

4. We also have to admit that the response for the recession was too late. Firstly, the government should not have let a recession happen. However, once it did, they waited for Lehman brothers to completely fail before taking concrete actions.