Financial events in the US in 2009 gave new meaning to the expression ?desperate times call for desperate measures?. Last year witnessed a recession that was widely considered to be the worst since the Great Depression of the 1930s. Since the seriousness of the recession wasn?t obvious until the September 2008 Lehman collapse, 2009 marked the first full year in crisis mode, as well as the first testing year for a new President.

As bad as the American economy was last year, the ?desperate measures? taken are the reason the economic crisis is called the Great Recession rather than the Great Depression II. Under the leadership of Ben Bernanke, the Federal Reserve took a series of bold steps, pumping money into the economy and dropping rates to near zero. Congress passed a series of Bills to fight the recession.

The results of these actions were mixed. The US government succeeded in its most important objective?preventing financial catastrophe?and even managed to turn the economy around, leading most analysts to say the US recession ended. But while Obama and his allies hit the broad targets, many of their specific goals weren?t met. Mortgage legislation had a much smaller impact than expected, and stimulus spending failed to cap unemployment at 8% as promised.

As 2010 begins, recovery is proving to be bittersweet. With double-digit unemployment (10% in November), many analysts are predicting a jobless recovery. Obama has proposed some measures to boost job growth, but the results will likely be slim and he is under intense political pressure to limit spending, thus curbing his ability to act. Recovery and job growth are also hampered by banks? hesitation to lend. And while the national economy may be improving, some state and local economies?most notably California?are still on the decline.

With 2009 behind them, the new year in the US looks much rosier than the one they just finished. Still, with double-digit unemployment and insufficient lending, recovery is a work in progress. And with the economy stabilising, Obama cannot delay much longer addressing an old problem that only intensified last year?the federal deficit.

?feedit@expressindia.com