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Financial repression "played an important role in reducing debt-to-GDP ratios after World War II" by keeping real interest rates for government debt below 1% for two-thirds of the time between 1945 and 1980, the United States was able to "inflate away" the large debt (122% of GDP) left over from the Great Depression and World War II. [2]
In the United States, the Great Recession was a severe financial crisis combined with a deep recession. While the recession officially lasted from December 2007 to June 2009, it took many years for the economy to recover to pre-crisis levels of employment and output .
You may have heard that Social Security is facing financial trouble because Congress and presidents raided the trust funds and wondered how such a thing could be allowed to happen. Don't miss
United States Department of the Treasury. After the freeing up of world capital markets in the 1970s and the repeal of the Glass–Steagall Act in 1999, banking practices (mostly Greenspan-inspired "self-regulation") and monetized subprime mortgages sold as low risk investments reached a critical stage during September 2008, characterized by severely contracted liquidity in the global credit ...
Moreover, “excessive fiscal profligacy in the U.S., coupled with protectionist policies and financial repression, could lead to higher inflation and severe global instability.”
File photo: Federal Reserve Board Vice Chair for Supervision, Michael Barr, testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing in the wake of recent bank failures, on ...
This method of negative real interest rates has been claimed to be a form of financial repression by governments as it is "a transfer from creditors (savers) to borrowers (in the historical episode under study here—the government)" and "given that deficit reduction usually involves highly unpopular expenditure reductions and (or) tax ...
Debt held by the public, or the amount the U.S. owes to outside lenders after borrowing on financial markets, is already at about 100% of GDP, with that ratio soon expected to blow past the all ...