Recession and social problems. The recession began in the summer of 1990 with the typical signs — a fall in retail sales, a drop in the number of new houses being built and, most important, a rise in unemployment. While inflation was not a problem, the unemployment rate reached about 7 percent and affected both white- and blue-collar workers. Many of the nation's largest companies announced they were downsizing, or dramatically cutting their labor force to trim costs and remain competitive. As many as 25 million Americans were out of work at some time during 1991, and the number of Americans living in poverty rose by two million. Bush's plan to deal with the recession included a middle-class tax cut, financial help to families buying their first house, tax credits for health insurance, and lower taxes on capital gains. In the eyes of many, these actions came too late.
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