Word: downturning
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Dates: during 1980-1989
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...even greater peril, in the view of TIME's economists, is the effect of the debt burden on U.S. corporations and consumers in the event of recession. So extended are American businesses and individuals that the resulting bankruptcies and attendant hardships would probably be more severe than during any downturn in recent memory. Says Board Member Lester Thurow, an economist at M.I.T.: "You are going to have more personal defaults than normal, more corporate defaults than normal, more Third World debtor defaults than normal -- all of those dominoes tumbling at the same time...
...when fears began to grow that the recovery might have run out of momentum. Growth virtually stagnated from April through June, expanding a measly .6%. A primary cause was trouble in America's farm and oil-producing states, whose woes temporarily dragged down the whole U.S. economy. But the downturn jitters proved unwarranted; the economy bounced back with a 2.8% expansion in the third quarter and was expected to perform at about that level during the October-December period...
...then nearly a decade of rising inflation. By 1979, however, OPEC was already slipping from Saudi control. In that year the fall of the Shah of Iran led to a second worldwide oil shock, which nearly doubled prices once again and brought on the sharp recession of 1982. The downturn, combined with conservation and the development of new energy sources, considerably reduced the group's power. Since late 1985 the world has been awash in oil, and OPEC can no longer dictate prices...
...reported last week that the gross national product grew at the respectable annual rate of 2.4% for the three months ending with September. The sharp improvement over the all but lifeless .6% growth in GNP that was posted during the second quarter at least momentarily quieted fears of a downturn. Says Walter Heller, a professor of economics at the University of Minnesota: "There is no recession in sight...
...with a large boost in Government spending. The budget imbalance, said Heller, has canceled the country's antirecession insurance policy. Fortunately, if the economists' forecast is correct, the White House and Congress still have at least a year or two to rein in the deficit before the next downturn strikes...