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January 06, 2009

The global rescue

Our federal government has invested a large amount of money and resources in attempting to stabilize the economy during the recession. But with almost the entire world in a recession, have other governments also come to the rescue of their economies? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Indeed, they have. Now, in terms of the dollar size of the rescue, the U.S. is by far the leader. We have devoted the most money to our financial rescue packages. China's actually second. But you have to realize, of course, that economies differ in size. We are by far the largest economy in the world. So if you look at the size of the U.S. financial rescue packages - that are directed primarily at the banks - as a percent of our economy, we're not the largest. In fact, the U.K. and China in terms of percentage of their economy devoted to the financial rescue, almost three times larger; Russia, almost twice as big. Now these rescue packages have been focused on things like loan guarantees, direct loans to banks, stimulus plans and infrastructure spending, and there's likely, of course, more to come."

Posted by Dave at January 6, 2009 08:00 AM