Economy
In every part of the world, central banks cut interest rates in an effort to get ahead of the global economic downtown (predicted to be the worst since World II), but investors are placing their bets that banks will quickly run out of options and leverage. Companies large and small are taking austerity measures to survive. In the third quarter, hours worked fell 2.7% and non-farm output (a measure of productivity) fell 1.7%. U.S. unemployment is expected to rise from 6.1% to above 8%. In 2009, the IMF predicts the economies of the 31 most advanced nations will contract by 0.3%.
For Congress’ part, Speaker Nancy Pelosi has proposed a two-stage response: 1) spend $60 to $100 billion now, and 2) cut taxes next year.
