Presidents coming into office are not able to pick the type of economy in which they hope to preside over. This President-Elect, Barrack Obama is no exception and as he is sworn in the US economy may be at or near its low, or it might be on the verge of slipping into a depression, the likes of which we have not seen in almost 80-years.
When President-Elect Barrack Obama takes office he may put into play controls that may help the economic situation or harm it. He might set policies that make the economy inefficient or that stimulate its return to prosperity. If the economy slips into depression and regardless of fault, if it happens during his term of office it will be called the "Obama Depression" and something that may cement his legacy.
How bad are things, are they overblown?
Isn't this just a normal business cycle downturn, so isn't everything going to be okay? Well, we all wish it were that easy, but really they aren't. Sure, the Bush Administration had the US economy cooking along and so, it could take a bit of a hit without completely imploding, still, with the subprime lending fallout and banking sector on top of and due to the real estate bubble burst it has really been a double whammy getting into the down cycle.
Yes, the up cycle is coming, regardless of what the government does to help out. But, what if the government does the wrong thing like raise taxes, cause small business failures or puts too much regulation on banks? This will affect credit markets for years to come, slow growth and stagnate the economy, all the while the 70 million baby boomer consumers are changing their buying habits and finishing up their lifecycle. So, things are indeed, quite serious.
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