Greenspan believes Recession will Last as Long as the Credit Crisis

April 22, 2008

Alan Greenspan, former chairman of the Federal Reserve and economic guru, was on the record for saying recently that he honestly hopes that the very worst of the credit crunch  is over and that the duration of a recession for America is tied directly to the length in which the financial turmoil of the county lasts.

Speaking by means of satellite to an economic conference being held in Italy, Greenspan has mentioned that the situation should still be seen as one of critical concern, and that the economic crisis may very well find itself being dragged out into 2009.

He added to his message that the current recession would trump both the past two economic slumps in terms of the length of time they were present — that is to say, if this current crisis continues into 2009.

Contrasting Greenspan’s view of the economy is the NBER, or National Bureau of Economic Research, an organization that determines the cycles of the American economy. They have yet to make a final statement on whether or not the current slump is truly a recession.

Greenspan expressed further optimism regarding the economy and specifically the housing market when he said that he believes the value of homes will return to normal well before the beginning of next year, signifying a turnaround for the economy that will cause a ripple effect through the financial markets, affecting everyone in a positive manner and therefore aiding to a nationwide economic vitalization.

The current economic sluggishness has been attributed to a combination of factors, including but not limited to the supbrime market meltdown and a ferocious credit card debt problem that is seeing a record number of people who are missing their payments and making as little progress as necessary with their credit debts. Greenspan seems to believe that these issues should eventually take care of themselves if the country manages to regulate itself in a responsible manner and take care of the debts regarding its credit.

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