High inflation is not a financial crisis, it is simply a rise in prices. The Volcker Fed induced a recession by raising short term interest rates to the point where long term expectations edged downward while the Reagan administration applied the proper policy to help alleviate the economic reaction to Fed policy. Lowering of taxes has a dis-inflationary effect, as it supports a reduction in total costs. Combined with a massive spike in federal expenditures (inflation adjusted federal expenditures) depicted below, the U.S. economy overcame the downturn by employing various Keynesian policies.This crisis or so called Great Recession didn't affect nearly as many people as the 81-82 Double dip recession that affected every American because it was compounded by a worse financial crisis, high inflation.
Yet during this time, total net worth (adjusted for inflation) never declined by any meaningful level, where as in 2009, a most severe financial crisis occurred.
TARP was a pure capital injection as a means of mitigating insolvency fears among international depositors who hold trillions of dollars in U.S. banks and money markets. It just so happened to have better results than a resolution trust style method where a financial entity would be created under the control of the U.S. Treasury, and would take on the most grotesque debts, thereby providing a cash injection.TARP was forced on a number of banks and never changed behavior. It rewarded bad behavior thus making it more of a media generated crisis than a true financial one.
Now you are being just plain ignorant!Percentage change, debt per capita mean absolutely nothing compared to actual debt service and people unemployed/under employed/discouraged
The annual rate of change of debt per capita is a forward indicator of economic growth. Your obsession with elementary analysis of lagging indicators has gotten the best of you yet again. Current trends show the numbers are actually improving across the board! Employment is up, while the number of unemployed and discouraged workers has persistently declined.
Do you expect economic growth to increase while government revenue (which is explicitly tied to economic growth) holds constant? Only in your wildest partisan fantasy!That is true but that is going to happen because the private sector economy is going to grow because it has to grow. That sector will do whatever it has to do to stay in business and grow meaning that once those 20 million unemployed/under employed/discouraged workers back to work full time or at least most of them, then there is going to be more demand that products and that drives up inflation which affects not not only personal income but debt service which is now the fourth largest budget item.