"Behind this sluggish recovery lies a vicious cycle: The crash led to mass layoffs and wiped out trillions in household wealth. That led to a huge drop in consumer spending, which created an “output gap” — an economy working at less than full capacity — that persists today. State tax revenues were decimated, and many states responded by cutting their budgets, which led to more layoffs and fewer tax dollars coming in even as pressure on various social welfare programs increased," writes Joshua Holland.
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