Correct, altho personally, i think there can be many definitions of the term.
my own definition of recession is when the interest rate is below the inflation rate. The only time that occurs is when the economy is sick. By that definition, weve effectively been in a recession since 2000, which "feels" correct, as the prime driver for economic growth since 2000 has been massive amounts of stimulus. Without the government hollowing out the nation, wed have been in recession for 12 years now.
The 90s was a truly healthy economy, with a strong dollar, honest interest rates, and strong growth
Regardless of political spin on either side... The fact is that the nation has been in a "slow to no" growth pattern for the past 5 years.Isn't the hypothetical that we're in a recession again itself a sort of spin
http://www.tradingeconomics.com/unit...tes/gdp-growth
There was a massive hit in 2009, and since that point in time there have been only TWO economic quarters where the GDP grew at 4%. Every other quarter combined has averaged an anemic 1.64%. That's not good. It isn't technically a recession, but it is certainly lousy. Combine that with equally substandard job growth and while you may not have a technical recession, it can easily be said that the USA has had a very poor economy for the last 4-5 years.
The spinmeisters can say that it isn't a "recession" until they are blue in the face. But the economic reality is that the USA has been in a metaphysical recession for the past 5 years - and I'd argue it is closer to being a depression.
Unemployment is still high and isn't getting any better.
http://data.bls.gov/timeseries/LNS14000000
The cost of living in the US is high and isn't getting any better, meaning consumer buying power is poor... This is especially true for energy, food, transportation, and fuel - all staples which drive total cost of living from your pocket.
http://www.bls.gov/cpi/cpid11av.pdf
While at the same time that consumer buying power has been dropping because of inflated costs of living, the average household income has been decreasing...
http://www.deptofnumbers.com/income/us/
And of course the national debt has been skyrocketing....
http://zfacts.com/p/318.html
The nation is printing money like crazy which is a slow fuse bomb for higher inflation and will prolong the negative outlook for years to come...
http://www.federalreserve.gov/releases/h6/current/
Now stack on that the fact that the "tax deal" they just passed has decreased everyone's paycheck. High unemployment. Lower earning power. Smaller paychecks. Bigger debt. Lower value monopoly money. Expensive energy and food. And now lower GDP.
As far as government spending goes - you can't have the government "quantitatively easing" the economy during times of prolonged low to no growth. The negative growth isn't "austerity" because the US government is not in any way being thrifty. Having the government be the driver of that much of the GDP is a recipie for disaster. They have been growing at a rate of 6 to 8% for the entire time that the US economy has been growing only at 2%. You can't have a government that constantly grows at an 8% rate while the nation is only growing at 2%. It can't be sustained.
So right now we're smack in the middle of what I call the "Government Bubble". And like the Tech bubble and the Housing bubble, this bubble will also pop. Heaven help us when it does. Regardless, dickering over whether or not we are in a technical recession is sophistry. The nation is in a MASSIVE economic downturn that has been prolonged by bad policy and there are no signs that it is going to improve. As far as "Planet Earth" is concerned, the US has been in a recession for 5 years and there's no change on the horizon.
Historical data has shown when the federal government spends on infrastructure and/or military, it acts as a catalyst for the private sector to spur investment. No one cares about the national debt except for people who advocate going back to the gold standard and repealing the 16th amendment. There is also data to suggest that in times of slow to negative GDP growth, if the federal government cuts back on spending, it puts the economy in an even worse spot.
I would rather us term out our debt to over 400 years and have a multi-trillion dollar spending program to get our economy (capital, labor, equipment) to its highest threshold, rather than dither around for 10-20 years and wait for the private sector to come back out of its shell on its own.
The problem really isn't the contraction, it's the crazy talk that they engaged in claiming otherwise.
If you watched ABC news last night you would think we've entered the new golden age of prosperity, they didn't even bother mentioning a GDP contraction. It was 14000 stock market (Obama is a genius), house prices are rising (Oh great leader, oh great leader), hints at how people will be able to sell all their homes at profits (Mount Rushmore, Mount Rushmore) and other nonsense.
How a contraction of GDP can be explained away as positive is the perplexing thing, on top of the fact that all the nonsense this administration was behind claiming a contraction wouldn't occur due to what a great job they are doing.
I guess it's Bush's fault.
The most successful tyranny is not the one that uses force to assure uniformity but the one that removes the awareness of other possibilities.
I can't disagree with this.
Also, given the facts that
-population numbers are increasing
-life expectancies are increasing
-people are retiring later in life
-many businesses are doing the same work with fewer employees thanks to a multitude of factors
In the big picture, unless another artificial bubble comes along to keep things afloat, you're witnessing the death spiral of capitalism as we currently practice it. Most on this forum will live to see a day when society changes its outlook on what constitutes a work-week, exactly who should 'have' to work, etc. And the change in mindset will not be pretty, but it will be completely necessary.
The conservatives should be lauding this news because it resulted in a decrease in federal spending. Also, we just had a hurricane that hit the most densely populated area in the US.
But then again, you speak out of both sides of your mouth. The federal government either has no affect on the economy, or it is a critical part of the health of the economy, and it is irrelevant whether it is redistributed private money or not, the only relevant issue is whether it gives us growth and employment.
On the contrary, plenty didnt predict it comming and demanded more spending and more debt.
If you leave enough people guessing a few will ultimately be right... and by all means, we have a f*ckton of economists around telling us to do and what not.
Since when did one of them add just one product other than hot air to the market? Banking industry is pulling 9% of the GDP, yet they dont really *produce* any goods..
Stop with the left wing media shit, you should be HAPPY that government spending went down. But then again your head would explode because you are accepting the fact that federal spending is actually a NET GAIN for the economy, completely nullifying your entire ideology that government spending is just theft form the private sector, even though modern econ and business say ITS IRRELEVANT.
The Government cant keep propping up the economy soon they will run out of money then they will run out of other peoples money
why is that so hard to understand
Obama spent over 800 billion dollars to get the economy to only grow about 2% a year for 3 years
you do the math how much would need to be spent for the economy to grow at 5% where it needs to be growing at. Then you would have to spend that every 3 years to keep it going
No Government can afford to keep doing that Just ask Greece
this is what happens when you really on the government to prop up the economy when the money runs out either you got to keep spending more money you don't have or you see a decline
this is why We should have never had the Government prop up the economy to start with and we would not have seen a decline
Last edited by Vyxn; 2013-01-30 at 05:32 PM.
Of course we can, we have the largest tax base, largest natural gas, coal, and other natural reserves, most sophisticated military, most diverse economy than any other country on the globe. We could spend 500% of debt to GDP and we would be fine. We could term out all of our debt over the course of 500 years and global investors wouldn't give a shit.
Most conservatives and libertarians really don't understand how powerful and productive the US is. We have 2 states that produce more than several countries COMBINED. We could literally piss away another 16 trillion on building anti-personnell gun on each and every school to shoot mass shooters, and the global community wouldn't give a shit because WE OWN the global economy.
Yet most of what the bank does for you can be done by a computer, even stock trading is done without much human interaction. How can a computer be worth 9% of your time / money?
I dont mind paying for a service, but bankers making billions is a shear disgrace when compared to people working their ass off to support their families.