Saturday, November 16, 2013

Janet Yellen : Why Was There Economic Prosperity in the 1990s in the United States? (1998)

The 1990s boom in the United States of America was an extended period of economic prosperity, during which GDP increased continuously for almost ten years (the longest recorded expansion in the history of the United States). It commenced with the end of the early 1990s recession in March 1991, and ended with the early 2000s recession, which started in March 2001.

The 1990s is remembered as a time of strong economic growth, steady job creation, low inflation, rising productivity, and a surging stock market that resulted from a combination of rapid technological changes and sound central monetary policy.



The prosperity of the 1990s was not evenly distributed over the entire decade, however. The economy was in recession from July 1990 - March 1991, having suffered the S&L Crisis in 1989, a spike in gas prices as the result of the Gulf War, and the general run of the business cycle since 1983. A surge inflation in 1988 and 1989 forced the Federal Reserve to raise interest rates to 8% in early 1990, restricting credit into the already-weakening economy. GDP growth and job creation remained weak through late-1992. Unemployment rose from 5.4% in January 1990 to 6.8% in March 1991, and continued to rise until peaking at 7.8% in June 1992. Approximately 1.621 million jobs were shed during the recession. As inflation subsided drastically, the Federal Reserved cut interest rates a then-record low of 3% to promote growth.
For the first time since the Great Depression, the economy underwent a "jobless recovery", where GDP growth and corporate earnings returned to normal levels while job creation lagged, demonstrating the importance of the financial and service sectors in the national economy, having surpassed the manufacturing sector in the 1980s.
Politically, the stagnant economy would doom President George HW Bush in the 1992 election, as Bill Clinton capitalized on economic frustration and voter fatigue after 12 years of Republican stewardship of the White House. Unemployment remained above 7% until July 1993, and above 6% until September 1994.

It was in the spring of 1994 that the U.S. economy finally reached "escape velocity": GDP growth surged and the number of jobs created(3.85 million) set a record that has yet to be surpassed as of 2013. But 1995 would bring a pause in economic growth, primarily because the Federal Reserve raised interest rates from 3% to 6% beginning in late-1994 to prevent inflation from rising after such rapid growth. The pause was short-lived, however, as the economy adjusted and the surge of investment in the Dot-Com bubble would jumpstart the economy beginning in late-1995. 1996 saw a return to steady growth, and in May 1997 unemployment fell below 5% for the first time since December 1973.
This prosperity, combined with the Budget Acts of 1990 and 1993(which raised taxes and restrained spending), allowed the federal government to go from a $290 billion deficit in 1992 to a record $236.4 billion surplus in 2000. The reduction in government borrowing freed up capital in markets for businesses and consumers, causing interest rates on loans to fall creating a cycle that only reinforced growth. Government debt increased from $3.02 trillion in 1990 to $5.413 in 1997 and flatlined, barely increasing to $5.674 in 2000
1995-2000 is also remembered for a series of global economic financial crises that threatened the US economy: Mexico in 1995, Asia in 1997, Russia in 1998, and Argentina in 1999. Despite occasional stock market downturns and some distortions in the trade deficit, the US economy remained resilient until the Dot-Com Bubble peaked in March 2000. The Federal Reserve had a hand in propping up the US economy by lowering interest rates to 4.75% by November 1998 to flood the world financial markets with dollars and prevent a global economic crisis.
The easing of credit also coincided with spectacular stock market run-ups from 1999 to 2000. The NASDAQ, at less than 800 points in 1994, surged to over 5,000 in March 2000. The DOW Jones Industrial Index traded at roughly 2,000 points in 1990 and 4,000 in 1995, nearly tripled to over 11,000 by mid-2000.

According to the National Bureau of Economic Research, the 1990s was the longest economic expansion in the history of the United States, lasting exactly ten years from March 1991 to March 2001. It was the best performance on all accounts since the 1961-1969 period. The importance and influence of the financial sector only grew, as demonstrated by the bursting of the Dot-Com Bubble in 2000 followed by a recession in 2001. The effects of the early-2000s recession would continue to be felt through the end of 2003. The US economy has been unable to replicate the successes of the 1990s as of 2013, having experienced 6 years of sub-par growth and job creation since.
 Janet Yellen

http://en.wikipedia.org/wiki/1990s_Un...

No comments:

Post a Comment

Blog Archive

“Control oil and you control nations; control food and you control the people.” Henry Kissinger


once a standing army is established, in any country, the people lose their liberty.”
George Mason

“Military men are dumb, stupid animals to be used as pawns for foreign policy.”
Henry Kissinger

“If you are an ordinary person, then you can prepare yourself for war by moving to the countryside and building a farm, but you must take guns with you, as the hordes of starving will be roaming. Also, even though the elite will have their safe havens and specialist shelters, they must be just as careful during the war as the ordinary civilians, because their shelters can still be compromised.”
Henry Kissinger

"We don't let them have ideas. Why would we let them have guns?" Joseph Stalin

The people who cast the votes decide nothing. The people who count the votes decide everything.
Joseph Stalin

Governments keep a lot of secrets from their people . . .
Why aren't the people in return allowed to keep secrets
from the government?

PHILIP ZIMMERMAN, DER SPIEGEL

“Some call it Communism, I call it Judaism.”

Rabbi Stephen Weiss

“Anti-Communism is Anti-Semitism.”
Jewish Voice, July - August 1941

Taxing People is Punishing Success
UNKNOWN

There's the rich, the poor, and the tax payers...also known as the middle class. Robert Kiyosaki

The Tax you pay is The Bill for Staying Stupid

Stefan Molyneux


“The modern banking system manufactures money out of nothing. The process is, perhaps, the most astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint and un-mint the modern ledger-entry currency.” Major L L B Angus

The few who understand the system will either be so interested in its profits or so dependent on its favours that there will be no opposition from that class, while on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system will bear its burdens without complaint and perhaps without even suspecting that the system is inimical to their interests.
The Rothschild Bros

"Debts must be collected, bonds and mortgages must be foreclosed as rapidly as possible. When, through a process of law, the common people lose their homes they will become more docile and more easily governed through the influence of the strong arm of government, applied by a central power of wealth under control of leading financiers.

This truth is well known among our principal men now engaged in forming an imperialism of Capital to govern the world.

By dividing the voters through the political party system, we can get them to expend their energies in fighting over questions of no importance. Thus by discreet action we can secure for ourselves what has been so well planned and so successfully accomplished."

USA Banker's Magazine, August 25 1924


Cutting Tax Rates stimulates Economic Growth creates more Profit , more Jobs and therefore The Treasury ends up with more Tax Money
UNKNOWN

Taxation is legalized Theft
UNKNOWN

"The Objective of the Bank is not the control of a conflict , it's the control of the debt that a conflict produces . The real value of a conflict , the true value is in the debt that it creates . You control the debt , you control everything . this is THE VERY ESSENCE OF THE BANKING INDUSTRY , to make us all , whether we be nations or individuals , SLAVES TO DEBT " An UNKNOWN Banker

Patriotism is the last refuge... to which the scoundrel clings .... Steal a little and they throw you in jail ..steal a lot and they make you king ....

Bob Dylan


"Corporations are stealing billions in tax breaks, while the confused, screwed citizenry turn on each other. International corporations have no national allegiance, they care only for profit." Robert Reich


There is NO political answer to a spiritual problem!
Steve Quayle


Po
litical Correctness is a Political Stand Point that does not allow Political Opposition , This is actually The Definition of Dictatorship
Gilad Atzmon

The modern definition of racist is someone who is winning an argument with a liberal
Peter Brimelow


When People lose everything and have nothing left to lose , They Lose It !

GERALD CELENTE

Your Greatest Teacher is Your Last Mistake
DAVID ICKE

The one who Controls the Education System , Controls Perception
UNKNOWN

"The world will not be destroyed by those who do evil, but by those who watch them without doing anything."

Albert Einstein

In The Left Nothing is Right & in The Right nothing is Left
UNKNOWN


No man escapes when freedom fails; The best men rot in filthy jails. And those that cried 'Appease! Appease!' Are hanged by those they tried to please
UNKNOWN

Freedom is not Free
UNKNOWN

Don't Steal The Government Hates The Competition

Ron Paul

"Buy The Rumor , Sell The Fact " Peter Schiff


You can love your Country and not your Government

Jesse Ventura


" The Government Works for ME , I do not answer to them They Answer to ME "
Glenn Beck

"Tyranny will Come to Your Door in a Uniform "
Alex Jones

"The Government is not The Solution to our Problems , The Government is The Problem "

Ronald Reagan


"The price good men pay for indifference to public affairs is to be ruled by evil men." Plato


The world is a tragedy to those that feel, and a comedy to those that think...Beppe Grillo

"The people should not fear the government for it is the government who should fear the people" UNKNOWN

"If You are looking for solutions to the world's problems , look in the Mirror , You Are The Solution , You have the power as a human being on this planet " UNKNOWN

"They don't control us , We empower them " UNKNOWN

"Serial Killers do on a Small Scale What Governments do on a large one..."

Serial Killer Richard Ramirez

There is a Class War going on in America, & unfortunately, my class is winning." Warren Buffet

"When the people fear their government, there is tyranny; when the government fears the people, there is liberty."

Thomas Jefferson

"College is a waste of Money"
Albert Einstein

Schools manufacture people who think that they're smart but they're not.
Robert Kiyosaki

Education is what you learn after you leave School
Robert Kiyosaki

" ‏Schools were designed to create employees for the big corporations."
Robert Kiyosaki


"If a law is unjust, a man is not only right to disobey, he is obligated to do so" Thomas Jefferson

Dissent is the highest form of patriotism
Thomas Jefferson

“True education makes you feel stupid. It makes you realize you have so much more to learn.” Robert Kiyosaki


"One day your life will flash before your eyes. Make sure it's worth watching." - Gerard Way

"Aspire not to have More but to be More "
UNKNOWN

The losers in life think they have all the answers. They can’t learn because they’re too busy telling everyone what they know.
Robert T. Kiyosaki ‏

"Failure is simply the opportunity to begin again. -This time more intelligently." Henry Ford

What You Own Owns You
UNKNOWN

If you expect the government to solve your problems, you have a problem. Robert Kiyosaki

"Those who give up their liberty for more security neither deserve liberty nor security." Benjamin Franklin

"None are more hopelessly enslaved than those who falsely believe they are free.” -
Johann Wolfgang von Goethe

"Always trust someone who is seeking the truth , never trust someone who found it" Jordan Maxwell

Be The Change you want to see in The World
UNKNOWN

Failure inspires winners but defeats losers
Robert Kiyosaki ‏

“If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people” A Chinese Proverb

"First they came for the Socialists, and I did not speak out--
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out--
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out--
Because I was not a Jew.
Then they came for me--and there was no one left to speak for me." UNKNOWN