Tuesday, March 3, 2009

Arithmetic Requirement at the Treasury?

The government has responded to cries that its "stress testing" is not considering the worst case. I have not digested the whole of the document, but one part stuck out at me:
But, a key fact is that recessions are followed by rebounds. Indeed, if periods of lower-than-normal growth were not followed by periods of higher-than-normal growth, the unemployment rate would never return to normal.
Really Mr Treasury? Never return to normal?

It turns out that with an old fashioned pad and paper, you can convince yourself that constant positive real growth, however slow, will cause even 100% unemployment to ultimately return to normal.

The statement above is supposed to convince me that your previous documents are well-thought through? Precise? Prudent?

These people are managing our national treasury, they sure aren't Einstein.

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