WASHINGTON - It's finally official: the United States is in a recession. The government says it will do everything they can to fight it.
But some forecasters warn that this could still be the worst downturn since the early 1980s.
No Surprises Here
The confirmation from The National Bureau of Economic Research that the U.S. was in a recession didn't come as a surprise.
"I think what the economists are telling us what we already know, it's like a weatherman telling us it's raining outside," Barclay's economist Ethan Harris said.
The downturn started 12 months ago, making it longer than the average 10 months for recessions since World War II.
And since many analysts believe the economy has yet to hit bottom, this recession could be the longest since the war.
"Everything I'm doing is to address that slowdown the best way I know how and that is to stabilize the financial system," said Treasury Secretary Henry Paulson.
Financial policy makers have been working overtime to keep the economic problems from hemorrhaging.
It's Not the Great the Depression
Federal Reserve Chairman Ben Bernanke made it clear that there's no comparison between the current recession and The Great Depression of the 1930s.
However, Bernanke did hint that the Fed could reduce the benchmark overnight lending rate later this month along with other measures to unlock frozen credit markets - like using taxpayer money to infuse capital into Wall Street.
And he defended the necessity of saving financial giants - saying they were essential for the overall health of the economy.
"First of all, too big to fail is not a policy, it's a problem. To allow them to fail under these circumstances under the current conditions of financial markets would be to invite a major financial meltdown and serious, serious consequences for all of us in the United States and around the world," Bernanke said.
More Blows to the Credit Market
But nonetheless, the credit market is in store for more hits.
The number of people with delinquent mortgages is poised to nearly double by the end of next year, the Wall Street Journal reports.
In his first round of exit interviews, President George W. Bush said he was sorry that the financial hard times had hit the country.
"When the history of this period is written, people will realize a lot of the decisions that were made on Wall Street took place over a decade or so before I arrived as President," Bush said.
"I'm sorry it happened, of course. I don't like the idea of people losing jobs or being worried about their 401s," he said. "On the other hand, the American people have got to know that we will safeguard the system."
With the economy officially in a recession, House Speaker Nancy Pelosi is working on another $500 billion economic stimulus package that would create jobs and cut taxes for the middle class.
She hopes to have it ready to sign into law on January 20, when President-elect Barack Obama takes office.