Fighting recession has become a new kind of warfare
Five months into the economic crisis, experts predict a years-long recovery.
It's been five months since then-Secretary of the Treasury Henry Paulson publicly warned of a growing crisis in credit markets. Since then, successive American administrations have fought a deepening recession with the intensity and mountains of cash usually reserved for war.
Today lawmakers talk easily of numbers that a year ago would have sounded preposterous. The bank rescue announced this week could cost upwards of $2.5 trillion. The stimulus deal? That's $789 billion more.
Already the list of bailouts sounds like a roll call of past battles: AIG, Fannie Mae, Freddie Mac, GM, Chrysler. Almost 400 financial institutions now have received a federal infusion from Treasury's existing $700 billion recovery fund.
History tells them to react forcefully and fast to the downturn, say administration officials, and that's what they're trying to do. What they are fighting is not just the current downturn, but the possibility of years – perhaps a decade – of sluggish growth, of factories more idle than necessary, of unemployment that remains stubbornly high.
"The financial crises we face today are more challenging than anything our system has faced in the past ... It's going to require that we do extraordinary things," said Secretary of the Treasury Timothy Geithner at a Senate Banking Committee hearing on Feb. 10.
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