Easy Credit Caused The Recession And Eased Its Impact
Questionable lending helped sink the U.S. economy, but also provided a lifeline that kept countless firms afloat and averted an even deeper recession, according to research by University of Illinois finance professor Murillo Campello. The research was cited by President Obama in a report on the state of the economy, so you know it must be correct. The survey of corporate executives found that many small and mid-sized firms survived the economic storm by tapping easy, low-cost lines of credit locked in ahead of the downturn, during an era of loose lending that also included sub-prime home mortgages. "These lines of credit were so liquid and so accessible that it made this recession far less acute than it would have been otherwise," he said. read more