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Independent voices from the The Washington Times Communities
Topic - Richard Koo
The sluggish recovery, as GOP candidate Mitt Romney repeatedly notes, pales in comparison to previous comebacks in the U.S. economy since World War II, but studies show that recessions resulting from major financial collapses such as the one in October 2008 usually have slow and difficult recoveries.
U.S. consumers, saddled with more debt than assets after the financial crisis, had to reduce their debts and rein in spending for a long period to regain financial health, he said.
"The only way for the government to cushion the impact on total demand is deficit spending," he said.