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14 November 2007



Sometimes, our experience is the best teacher. Gathering information for a research is a reliable source in making conclusions. It’s ridiculous to think that payday loans are responsible for the economic mess in America. Apparently, economists have marked December 2007 the “official” beginning of our current recession. The National Bureau of Economic Research (NBER) identifies top activity at this point, and the U.S economy has been deteriorating since then. The NBER describes recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.” It seems other organizations are in the same boat. Backed by the government, academics and the private sector, it’s as close to official as possible. These conclusions are based upon unemployment, incomes, industrial output and sales data. The highest point in employment and incomes was marked that December. In January, industrial output peaked and five months later, in the month of June, sales peaked. Democrats claimed this wasn’t a shock and called for an economic stimulus package. “The announcement simply makes official what we have long known: with rising costs of living, rising unemployment, record foreclosures and depleting savings, we must do more to help families make ends meet,” says Senate Majority Leader Harry Reid. So, this would mean that the proposal to ban payday loans is not a good plan. Reid highlighted that a recovery package must create more jobs, cut middle class taxes and instill confidence in the market and the people. Payday loans, and any other similar form of lending, have proven once again the magnitude of their importance in our economy.

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