Economist Says We Can End The Recession By Reducing Household Debt

Big Think recently approached five leading international economists for their best predictions on when we will be out of the mess known as our national economy.

Watch for their commentary in the Big Think blog in the coming days. And after you listen to their ideas, you can let the countdown begin.

Today's prediction is from Professor Jan de Vries of the University of California, Berkeley. De Vried is the Sidney Hellman Ehrman Professor of History and is one of the world's leading specialists on the early modern history of economics. He holds a Ph.D. from Yale University and was awared the Heineken Prize for History in 2000 by the Royal Netherlands Academy of Arts and Sciences.

So, Professor de Vries, when will the recession end?

recession will end when three things have happened:

1. residential real estate prices reach a floor (based on rental rates and vacancy rates) that gives new buyers confidence to enter the market
2. trust is restored to commercial lending markets, which will require a belief that there are no more big surprises hidden in balance sheets and that the        regulatory environment will be predictable
3. household debt is substantially reduced

The first could happen within a year, the second is hard to predict, and the third will take longer, several years. And, as long as it is ongoing, consumer spending will be weak. This will not be greatly speeded by the stimulus package. It might slow the rise in unemployment, but won't revive spending in most sectors until the debt overhang is worked away."

How to make a black hole

Here's the science of black holes, from supermassive monsters to ones the size of ping-pong balls.

  • There's more than one way to make a black hole, says NASA's Michelle Thaller. They're not always formed from dead stars. For example, there are teeny tiny black holes all around us, the result of high-energy cosmic rays slamming into our atmosphere with enough force to cram matter together so densely that no light can escape.
  • CERN is trying to create artificial black holes right now, but don't worry, it's not dangerous. Scientists there are attempting to smash two particles together with such intensity that it creates a black hole that would live for just a millionth of a second.
  • Thaller uses a brilliant analogy involving a rubber sheet, a marble, and an elephant to explain why different black holes have varying densities. Watch and learn!
  • Bonus fact: If the Earth became a black hole, it would be crushed to the size of a ping-pong ball.

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Protected animals are feared to be headed for the black market.

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In a breakthrough for nuclear fusion research, scientists at China's Experimental Advanced Superconducting Tokamak (EAST) reactor have produced temperatures necessary for nuclear fusion on Earth.

Credit: EAST Team
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  • Nuclear fusion could someday provide the planet with a virtually limitless supply of clean energy.
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