Washington, D.C. — Nearly three decades of deregulation opened the door for banks, investment companies, insurers, and other firms to engage in the excessive risk-taking that culminated in the 2007–2008 financial crisis and triggered the Great Recession. Now, extremists from the far-right Heritage Foundation are laying the foundation for another crisis. Project 2025 includes well-documented plans to overturn post-crisis policies that protect consumers, investors, and the stable functioning of financial markets. But it also proposes new limits on regulators’ capacity to step in during periods of instability—specifically, restricting the Federal Reserve’s “lender-of-last-resort” function that allows troubled banks to borrow money quickly. A new Center for American Progress analysis shows how irresponsible this is by calculating the present-day costs of a repeat of the Great Recession.
This new analysis finds that a comparable financial shock and recession would result in 8.7 million people losing their jobs by 2026 and that employment would not recover to current levels until 2031. On top of this, the loss in real gross domestic product per capita over the next five years would be $7,774.
“If far-right extremists are successful in enacting Project 2025, the likelihood of a 2007-scale financial crisis would be greater, and this risks economic losses to workers and households that could exceed those in the Great Recession,” said Marc Jarsulic, senior fellow and chief economist at CAP and co-author of the column. “The proposals in Project 2025 makes things crystal clear—far-right extremists care more about bolstering Wall Street’s bottom line than protecting American families.”
Read the column: “Project 2025 Would Allow Financial Disaster To Bolster Wall Street’s Bottom Line” by Marc Jarsulic and Lilith Fellowes-Granda
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