9781422281185

low, and loaned banks and large corporations money to keep them from closing. In turn for lending money the gov- ernment owned parts of the banks and companies. In 2009, it owned about 80 percent of American International Insurance Group (AIG) and 60 percent of General Motors. It also owned part of about 700 banks. All together, it loaned out $4 trillion. These loans were paid back in a speedy manner most of the time, but still the government lost about $1.2 trillion. But most people agreed this was a good trade for preventing a complete economic collapse. The Struggle of the Unemployed As the Great Recession dragged on, many workers drew unemployment benefits. Unemployment compensation is money that states provide to people who are out of work. It helps them to survive until they can find a new source of income. In normal times, unemployed people can stay on these benefits for no more than about six months. During the Great Recession, though, benefits were extended to 99 weeks, or nearly two years. In Canada a similar system of benefits exists. It is called Employment Insurance. Employers and employees both pay amounts called premi- ums to fund this program. While the economy in Canada experienced a downturn from late 2008 through about mid-2009, it was not as deep or lasting as in the United States. In Canada, the recession was mild. The highest unemployment rate suffered was 8.7 percent in August 2009. The exporting of automobiles, mostly to the US, declined sharply. However, problems with

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The Economics of Global Trade