recession
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Causes:
<br>- legacy of accumulated excesses from delusional optimism of 1990s
<br>- overcapacity in production
<br>- overpriced financial investments
<br>- mountainous debt burdens for corporations and housholds, thus reluctance to invest or consume
<br>- companies struggle to dump excess production by selling cheap causing deflation
<br>- companies reducing jobs and workweeks
<br>- competition with lower-cost offshore manufacturers especially China
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Gov't remedies:
<br>- Federal Reserve can induce price inflation
<br>- Congress & White House can launch a stimulus program of public spending and quick-acting tax cuts (but causing huge budget deficits)
<br>- liquidate debt burdens:  write off failed loans (as it did in the savings-and-loan crisis of the 1980s) or create more lenient terms for indebted companies and households
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