US Overcomes Economic Curse Haunting 170 Years

Since the period immediately preceding the American Civil War (1861–1865), the US economy has fallen steadily into recession every decade, but this “curse” now appears to have come to an end. Writes about this Markets Insider.

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The last of these crises lasted from December 2007 to June 2009, which led to a huge reduction in the number of jobs in the United States. This economic downturn also triggered a global financial crisis, which, according to some experts, contributed to the growing popularity of authoritarian and populist leaders around the world.

But the US economy seems ready to challenge this trend for the first time in nearly 170 years, entering a new decade with no signs of recession.

The United States escaped the recession in 2010, because after the deep crisis of the previous three years, the economy could only grow.

Dr. John Marinescu, an assistant professor of economics at the University of Pennsylvania, says the main reason the United States escaped the recession in the 2010 year was because it fell too deep a few years earlier.

“The growth in 2010 and subsequent years came after the worst recession since the 1930s,” Marinescu said. “So there was room for growth.”

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However, economists say that the effects of the latest recession are still felt today. They primarily appear in the form of widening income inequality and worsening career prospects for millennials and other young people.

“We had a terrible recession and a very slow recovery,” said Dr. Tara Sinclair, associate professor of economics at George Washington University.

Sinclair noted that real wage growth is lower than previous generations experienced after the recession.

“Despite strong job growth, there are people who still need work,” Sinclair said, citing a November jobs report that showed the economy beat expectations and added 266 new jobs.

Dr. Robert Barro, a professor of economics at Harvard University, noted a sharp increase in the number of employed people under Obama and Trump.

“There was no downturn because real GDP growth rates have been remarkably stable, albeit at low averages,” Barro said, noting that U.S. GDP growth has averaged 2% since 2010.

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According to experts, all these indicators give reason for optimism: most likely, the US economy will not face a new recession in the 2020 year.

However, Barro said the US economy is now "saddled with a crazy trade war," which is a big factor dragging it down and increasing the chances of an economic downturn next year.

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