…the country is now immersed in a “doomsday cycle” wherein banks use borrowed money to take massive risks in an attempt to pay big dividends to shareholders and big bonuses to management – and when the risks go wrong, the banks receive taxpayer bailouts from the government.
Without more stringent reforms, “another crisis – a bigger crisis that weakens both our financial sector and our larger economy – is more than predictable, it is inevitable,” Johnson says in the report, commissioned by the nonpartisan Roosevelt Institute.
The study says that “In 2008-09, we came remarkably close to another Great Depression. Next time we may not be so ‘lucky.’ The threat of the doomsday cycle remains strong and growing,” they say. “What will happen when the next shock hits? We may be nearing the stage where the answer will be – just as it was in the Great Depression – a calamitous global collapse.”
After reading articles posted by several economists, they generally agree the economy hasn’t “bottomed out” yet. Signs of commercial real estate meeting the same fate as home foreclosures appear to be taking shape. For example, one of the large malls where I live in CO has been returned to the lender to avoid foreclosure so some sort of refinance plan can be done. While the retailers in that mall will remain open, for how long is the unknown question.
The 2008-09 downturn, I suspect, was a preview of coming attractions.