A University of Louisville economics professor says financial news this week from Wall Street doesn’t bode well for the country as a whole. Professor David Dubofsky says most people may not be directly affected by news this week of the bankruptcy of Lehman Brothers or the government bailout of insurer AIG. But those two developments could mean major trouble for the economy as a whole.
For one thing, Dubofsky says the U.S. government is taking on a lot of financial responsibility.
“The government is bailing out a lot of things right now!” says Dubofsky. “I mean, they took on 29-billion dollars worth of debt with Bear Stearns, then they took on Freddie and Fannie, now they’ve basically taken on AIG, and it gets a little bit scary when you think about how much liability the federal government is taking on right now.”
Dubofsky says the meltdown in the financial markets signals a greater chance the country could slide into a recession.