The recession we face

A recession “is a prolonged period of time when a nation's economy is slowing down, or contracting. Such a slow-down is characterized by a number of different trends, including: people buying less stuff; decrease in factory production; growing unemployment; slump in personal income; an unhealthy stock market.” (http://money.howstuffworks.com/recession1.htm) This economic downturn must also continue at least 6 months to become a recession. The last recession occurred in 2001, from March until November of that year. Last time to get us out of recession the, “The Federal Reserve has cut interest rates 10 times this year - three of those since Sept. 11 - in a bid to keep consumers spending and help lessen the severity of a downturn.” (http://money.cnn.com/2001/11/26/economy/recession/, from November 26, 2001) This time, however, I’d believe these actions will not help the national economy enough to get us out of recession. Unlike the previous recession, this recession has become too great of a downturn to overcome. First, the jobless rate is higher, and second, this didn’t just occur in America this time, but the whole world. This hurts more individuals and companies than before because of this. Simply cutting interest rates cannot have the same impact on the recession as it did in years past because we cannot look to other countries for help (in trade and business cooperation), and the recession is too deep to get failing businesses out of debt simply by cutting their rates.

When the government told the American people that we were not in a recession it didn’t matter or change anything, because the American people felt this was a total lie, or least not the whole truth. Telling the American people can have a positive impact on the economy in that saying so will cause the American people and businesses to work harder in helping the economy overall, instead of just looking out for their own interests at the time. This is because most businesses realize that when other companies are going out of business, which are connected to their line of work, there is increased chance that their companies will fall under (in times of economic downturn). Telling the American people that we’re in a recession can also have negative impacts as well. After hearing this many Americans will stop spending as they are more fearful that they will lose their jobs and have to save for the future. Not spending money of course decreases the economy and many businesses suffer (as every business needs people paying their services). “Tax increases, budget cuts, and regulatory actions tend to suppress business activity.” (http://www.wisebread.com/can-the-government-help-in-a-recession) This being said, the logical thing to do in this situation would to, first, cut taxes to give people more spending money, and second spend government money on projects and causes that will supply jobs and give money to workers. These projects and causes can include things similar to the highway act and other government paid work projects (like the Hoover dam, etc.) More people working equals more money to spend.

RECESSION

After months, (possibly years!) of speculation, the government has finally owned up to the fact that we are in the midst of the dreaded “r” word. Yes, the word “recession” can strike fear into the most seasoned businessman, wealthiest investor, and industry heavyweights. A “recession” is defined by the National Bureau of Economic Research as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP (Gross Domestic Product), real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.”
Perhaps the most terrifying aspect of a recession for our economic experts is the chance that it could actually turn into a depression, with even far worse consequences. Harry S. Truman defines the difference between a recession and depression in a short and to the point quote, “It's a recession when your neighbor loses his job; it's a depression when you lose yours.”
- http://www.nber.org/cycles/recessions.html
- http://www.brainyquote.com/quotes/quotes/h/harrystru132381.html


The last recession occurred in the early 2000’s with 9/11, stock and accounting scandals, and the implosion of dot.com growth considered to be major contributors. This 18 month (April 2000-October 2001) recession was considered a very minor recession, unlike the current recession which is expected to be much more severe, cause bigger problems and be more of a struggle to get out of. Barack Hussein Obama II sure does have a lot on his plate and this recession and his first few months in office definitely will have a large effect on the children and future of our country.
- http://recession.org/history

The Bush administration, led by George W. and Vice President Dick Cheney, blamed the small recession on the previous President Bill Clinton, most likely because they thought it might take them a while to get out of the recession or because they felt it would take the pressure off them to place the blame elsewhere. George W. Bush started on the road back out of recession with this quote, “Dick Cheney and I do not want this nation to be in a recession. We want anybody who can find work to be able to find work.” In the end, through a couple key decisions, mainly about helping the unemployed, they were able to get the country through it. Bush first proposed to Congress an economic stimulus package that would give more tax cuts and aid unemployed workers. The proposal was passed by the House but not the Senate. The second time around on voting on it; it was then passed by both. This alone didn’t boost us out of the recession, but the tax cut of an official 1.35 TRILLION DOLLARS among other small assistance programs moved the country back onto the right track.
http://search.cnn.com/search?query=2000%20recession&type=web&sortBy=date&intl=false

This recession as of now is on pace to cause greater negative effects on America than the last considering many companies are already going under. We’re not talking small businesses failing, but huge nationwide companies. Hundreds of thousands of employees are being laid off, car companies in particular are losing profit and business more than ever and Chrysler says they could go BANKRUPT within weeks. “Bankrupt” meaning totally depleted assets, no recovery plan, and threatening complete closure. These facts lead us to believe that we are not dealing with a recession that we’ll be able to get out of without hard, dedicated, long work. Creating tax cuts and plans for assistance to the unemployed is the start of getting out of this recession too, but it will require other resources as well. It is easy for me to say that I believe the richest men of the country such as Bill Gates should lend/give large sums of money to the government to help us get our feet back on the ground because I’m not the one lending the money. But I feel like once you have a few billion dollars you have enough to share. I’m sure people, maybe even I, would feel differently if they had that kind of money and were the ones giving it up, but ideally that would be a solid start. On a more logical note, we need change and we need change fast. On the 11:00 news playing right now, Steve Forbes, editor and chief of Forbes Magazine, says, “We need to lower mortgage rates, get the real estate market rolling again with better pricing, keep gasoline at a low price, and reduce corporate and middle class tax rates.” I strongly agree with all of these ideas, and I believe that these, mixed with a combination of other small plans could get us out of the recession successfully.
- http://dictionary.reference.com/browse/bankruptcy
- Fox news, the TV program playing at 11:00 p.m. EST (I got the info on Forbes here)

I think the administration not naming this slump as a recession until recently did indeed have an effect both positively and negatively. First, it kept the country from becoming frantic and completely worried about falling into another depression, since many hearing that we are in a recession would have caused Americans to stop spending as much money and put more businesses out. But vice versa, if we had known about this recession earlier we would have saved our money more and people would not spend so much on cheap gifts and un-needed things. Basically, we would be in better shape as to the amounts of money we have in our pockets since the public would have been much more careful with their spending money and be more conservative in some cases. Another key negative effect is how our country’s action, or inaction, influences the global market and foreign investors. Waiting so long to act and allowing these large companies and banking institutions to get to the point where bankruptcy was imminent caused a snowball effect with far-reaching consequences. Those foreign countries and their businessmen that invest heavily in our stock market, seeing the obvious confusion and lack of a significant or stable recovery plan, ran scared and caused further plummeting of our economy. I believe this made the problem even worse than it had to be.







A sharp slowdown in finance and insurance, a further contraction in construction, and a deceleration in durable-goods manufacturing were the leading contributors to the economic slowdown in 2007, according to revised statistics of real gross domestic product (GDP) by industry from the Bureau of Economic Analysis.
http://www.bea.gov/newsreleases/glance.htm





- http://www.bea.gov/
- http://www.nationalreview.com/kudlow/kudlow200408040850.asp
- http://money.cnn.com/2001/11/26/economy/recession/

Our Economic Crisis

Our economic situation today is known as a recession. A recession is an economic time period where there is a general economic decline for two or more consecutive quarters, a few month intervals. As of October 2008, our country was announced to be in a recession. The last time we declared to be in a recession was in 2001, after the September 11, 2001 attack. This recession lasted about 18 months, until our economy was back on track. However, the recession of today seems to be more comparable to the Great Depression of 1929- 1939, rather than the 2001 recession.

It seems as though our recession of today is most comparable to the Great Depression. As a result, we can look upon the Great Depression for insight as to how to solve this economic crisis. As a result of the Great Depression, President FDR created the “New Deals.” These were programs which were introduced to help jump start the economy, in hopes of getting America out of the Great Depression. The top three New Deals of President FDR were Civil Conservation Corps, Civil Works Administration, and Federal Housing Administration. The Civil Conservation Corps and Civil Works Administration worked to create more jobs in the public, such as railroad tracks, buildings and roads. However, the Federal housing Administration was built to create more houses to those who are less fortunate. As a result of FDR’s New Deals our country came out of the Great Depression in 1939. However, will these New Deals work for America today? In President FDR’s inaugural address of 1939, he stated about the unemployment rate. FDR replied, “More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toll with little return. Only a foolish optimist can deny the dark realities of the moment.” Obviously, FDR was tying to portray the image that this process of rebuilding our economy will take a lot of hard work, determination, and time. Even though these New Deals worked in the Great Depression, one does not know whether or not these programs will be the solution to this economic solution. Therefore, one can only try and try again until we are out of this economic crisis. As Barack Obama prepares for office, he is creating programs which will hopefully give us the jump start which the New Deals did. In one of Obama’s speech, Obama said, “…“change we need goes beyond laws and regulation – we need a shift in the cultures of our financial institutions and our regulatory agencies.” It is apparent that President-elect Obama realizes that this process will be long and hard, and will acquire much hard work to change the way we once were.

In today’s world, President-elect Obama has many choices as to what to do, in order to assist our country. It seems to me as though Obama needs to follow the guild lines of the New Deal in order to be successful. For example, an employing program must be installed, for those who have been recently laid off. Moreover, houses need to be provided for those who have no place to live. Even though these seem identical to the New Deals, Obama needs to create programs which model after the Great Depression’s solution yet are much more contemporary.

Our country was not officially called into a recession until this past October. However, it feels as though we have been in this recession for over a year. If our government had announced that we were in a recession before this past year, then our country would have had more time to analyze, assess, and do something about this problem. Without formally announcing we were in a recession, people continued to live their daily lives, if they were not affected. However, those who were affected by the ‘recession’ were receiving no assistance or compensation. As a result, the people who were not being helped thought that our country did not want to help them get back on their feet. It made the government seem as though people suffering were not as important, yet that is not true. Ergo, I believe that the government should have announced our recession a long time ago to start the healing process physically and mentally, to our country.

To President-elect Obama, I say good luck! My advice to him simply includes being honest with the American people. If he is to tell us step by step what he is doing, then more of the American population will have faith in him. Subsequently, a piece of advice I have for President- elect Obama, is to provide for the people on main street first, then Wall Street. I have complete faith in Obama that he will be able to bring our country together. At one of Obama’s speech, Renewing the Economy, Obama stated, “Now it falls to us. We have as our inheritance the greatest economy the world has ever known. We have the responsibility to continue the work that began on that spring day over two centuries ago right here in Manhattan, to renew our common purpose for a new century and to write the next chapter in the story of America's success. We can do this, and we can begin this work today.” With this, I have confidence that Obama will learn from the mistakes of our country, the strong decisions of our country (the New Deals) and the people, in order to restore our once strong economy.

http://www.investorwords.com/4086/recession.html
http://www.doctorhousingbubble.com/the-sham-of-our-current-unemployment-rate-numbers-lessons-from-the-great-depression-part-x-data-mining/
http://www.archives.gov/education/lessons/fdr-inaugural/images/address-2.gif
http://thecaucus.blogs.nytimes.com/2008/03/27/obamas-speech-on-the-economy/
http://www.nytimes.com/2008/03/27/us/politics/27text-obama.html?_r=2&pagewanted=all
http://americanhistory.about.com/od/greatdepression/tp/new_deal_programs.htm

Economic Recession

“A recession is a decline in a country's gross domestic product (GDP) growth for two or more consecutive quarters of a year. A recession is also preceded by several quarters of slowing down)” (http://www.rediff.com/money/2008/feb/14spec.htm)
The last time that the U.S. was in a seriously tough economic situation was during the Great Depression. The current economic crisis is said to be the “worst since the Great Depression.” During the Great Depression (1929 to World War II) the stock market crashed, the economy took a nosedive, and many, many people lost their jobs, people lost their homes, banks and businesses failed, etc. The U.S. got out of that recession because of two things: President Franklin Delano Roosevelt and his New Deal programs, and because we got involved in World War II after the Japanese bombed Pearl Harbor.
“The New Deal represented the culmination of a long-range trend toward abandonment of ‘laissez-faire’ capitalism, going back to the regulation of the railroads in the 1880s, and the flood of state and national reform legislation introduced in the Progressive era of Theodore Roosevelt and Woodrow Wilson.” (http://www.english.uiuc.edu/maps/depression/overview.htm) With the New Deal, many new programs were formed to help boost the economy once again. Also, FDR made jobs for the out of work: “An early step for the unemployed came in the form of the Civilian Conservation Corps (CCC), a program enacted by Congress to bring relief to young men between 18 and 25 years of age. Run in semi-military style, the CCC enrolled jobless young men in work camps across the country for about $30 per month. About 2 million young men took part during the decade. They participated in a variety of conservation projects: planting trees to combat soil erosion and maintain national forests; eliminating stream pollution; creating fish, game and bird sanctuaries; and conserving coal, petroleum, shale, gas, sodium and helium deposits.” (http://www.english.uiuc.edu/maps/depression/overview.htm)
I personally do not think that the strategy that got us out of the Great Depression will work for us again. It is possible that President Bush and President Elect Obama could make some new programs to help restart our economy, which was one thing that FDR did to help bring America out of the depression. But, the U.S. becoming involved in World War II is what really kick-started the economy again. I don’t think it would be productive to launch into another major war in order to get out of the economic slump.
I do not believe that it would have made a really dramatic difference if the administration had named this slump as a recession until recently. People already knew to some degree that the economy was in decline. It aids the country to do so because the people now really know what is going on and might even be able to help try and find a solution to the problem. It may have had a negative impact though, because people might not have known how bad the economy was and might have made foolish decisions with their money. For instance, putting their money into the stock market which is like a black hole, sucking up people’s money and giving nothing in return.
A suggestion that I would make to President Bush and President elect Obama would be that tax cuts alone probably aren’t going to cut it. I suggest looking at less costly ways of acquiring energy and looking to foreign markets. China is huge right now, so maybe if we opened up some kind of connection with them, it could help the economy. Also, I recommend staying positive and making the people feel more secure with the financial system. The more secure they feel, the more likely they are to put money back into the economy.

The Newly Declaired Recession

A recession is defined as a period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression. Although recessions are considered a normal part of a capitalist economy, there is no unanimity of economists on its causes. The government has now recently declaired that America is now having an issue with a recession. The last time taht America was in a recession was in the last two quarters of 2001 where the current value of the GDP went down but, because of an estimated decrease in the price level, the real value of the GDP increased 0.2 of 1% from the third to the fourth quarters.

While this cast doubt on whether a recession occurred in last part of the year 2001, but evidence will show that some economic trouble developed in the middle of 2000. This can be seen from the chart for private domestic investment, which is below.

According to the private, nonprofit, nonpartisan organization called the National Bureau of Economic Research or the NBER, determined economic recessions, the U.S. economy was in recession from March 2001 to November 2001 over a period of eight months. Economic conditions did not work up to the short definition of the word recession, which is "a fall of a country's real gross domestic product in two or more successive quarters." This has led to issues about the procedure for figuring out the starting and ending dates of a recession.

The NBER's Business Cycle Dating Committee or BCDC will use monthly, instead of quarterly, indicators to determine the ups and downs in business activity. It can be seen by pointing ouT that starting and ending dates are given by month and year, not quarters. Although there is controversy over the exact dates of the recession, which led to the characterization of the recession as the "Clinton Recession" by Republicans, if it could be traced to the final term of President Bill Clinton. A move in the recession date in a 2004 report by the council of economic advisors to several months before the one given by the NBER was seen as politically motivated. BCDC members say tha tthey would be open to bring up the dates of the recession as newer and more definitive data to become available. In 2004, NBER President Martin Feldstein stated: "It is clear that the revised data have made our original March date for the start of the recession much too late. We are still waiting for additional monthly data before making a final judgment. Until we have the additional data, we cannot make a decision."

Despite this as of 2008, no further revision to the dates has been made. By using the stock market as an unofficial benchmark, a recession would have begun in March 2000 when the NASDQ rashed following the collapse of thE Dot-com bubble. The Dow Jones Industrial Average was relatively unaffected by the NASDAQ's crash until the September 11, 2001 attacks, after which the DJIA suffered its worst one-day point loss and biggest one-week losses in history up to that point. The market rebounded, only to crash once more in the final two quarters of 2002. In the final three quarters of 2003, the market finally came back permanently now agreeing with the unemployment statistics that a recession defined in this way would determine to have existed in a span from 2001 through 2003. Really financial issues work back and forth and it is very hard to understand how money works. In the past recessions, like the Great Depression involved rebuilding the banking system entirely. The past recession fortunately is merely a financial cycle that has an uphill slope when the financial system is well and it goes down once it reaches a high and then back again. The recession we have has been working its way up but has not been a sudden one so it might fix itself on its own, hopefullt by 2010.

President-elect Barack Obama has declaired a plan to cut taxes on the poor and middle classs while raising the wealthy. He also should take a look at what FDR had done by following the guild lines of the New Deal in order to be successful. An employing program must be installed, for those who have been recently laid off. Houses need to be provided for those who have no place to live and the car companies need to be bailed out or else many jobs will be lost so that must be avoided.

http://www.businessdictionary.com/definition/recession.html
http://www.applet-magic.com/rec2001.htm

http://www.nber.org/cycles/recessions.html
http://www.businessweek.com/magazine/content/04_08/b3871044.htm
http://www.washingtonpost.com/ac2/wp-dyn/A38826-2004Jan22?language=printer

It's been on the news more and more, the term recession. Everyone has their own opinion on what the word means, but what does it really mean? We can look at a few places for answers. "A recession is when GDP growth slows, businesses stop expanding, employment falls, unemployment rises, and housing prices decline. For those reasons, many experts say the U.S. is actually in a recession now." http://useconomy.about.com/od/grossdomesticproduct/f/Recession.htm So then what is a depression? How much of a difference is there between a depression and a recession? A depression is a prolonged recession where GDP declines more than 10 percentage points and unemployment gets higher. To avoid this, we must make sure this recession doesn't get any worse. Well everyone knows about the great depression, but have we been in a recession since then? "The US economy has officially been declared to have been in recession since December 2007 - the longest downturn since 1982 "http://www.finfacts.ie/irishfinancenews/article_1015416.shtml I never really heard about recessions before now because I was younger and didn't pay attention or care. It seems like there's been more recessions than I thought there have been. And none of these have turned into a depression. It all depends on how our government will handle the situation. "This downturn promises to be the worst since the Great Depression in the 1930s," said Joshua Shapiro, chief U.S. economist with MFR, Inc., a New York forecasting firm. "We've only just started. I can't see bottoming out until sometime in 2010."http://www.baltimoresun.com/business/investing/bal-economy1202,0,2805606.story So this particular recession is the worst it's been in a really long time. It'll be tough for everyone for a long time but if we work hard we can manage to get out of this recession. So how do we get out of a recession? Well this is the hard part. The way we got out of the great depression was WWII. This however won't really help us now. Everywhere I read said different things but one recurring idea was the government spending more on American things which pumps money back into the system. People can spend this money and save this money for things they need.
Just recently the government named out situation a recession. Because of recession's definition it would have been unwise to name it that too early. Calling it a recession can be positive and negative. The positive is the government is recognizing this economic crisis. Other countries get worried when our economy is bad because we affect them. They'll want to help us out in this case. Some negatives however are it puts people in a little bit of a panic. People worry if it's going to be the next depression. They don't want to think that this will happen. This means even harder times than we already have. People have different ideas on how to get out of this recession. A suggestion I have is the government creating jobs. This is a way to get things done and it pumps money back into the system. It has a domino affect. These workers get money and spend it on things and those stores or restaurants can hire more people and the money will be flowing better this way. During the great depression this is one of the things they did. Create jobs I think is the best way to help our economy the most. We're in hard times right now but we need to stay focused and work hard and hopefully we'll be out of this recession sooner.

What is wrong with our money???

The current economic situation for our country is starting to get out of hand. The government has labeled our problems with the economy as an "economic recession" and this term can sound quite frightening to the average American. What exactly is an economic recession? What does it mean when our economy is receding. According to one source, in regards to the economy, the word recession "is generally used to describe a situation in which a country's GDP, or gross domestic product, sustains a negative growth factor for at least two consecutive quarters." However, this is just one definition for the term. In fact, there is an organization that is responsible for the declaration of a recession. This organization is the NBER, the National Bureau of Economic Research. This agency is also responsible for things such as the measurement of national inflation. Anyways, their definition of an economic recession is a "significant decline in economic activity lasting more than a few months." Since it takes a few months, usually about six, to determine a recession, it could explain why the government didn't officially state that we were in a recession until recently. History shows that the last time the country was in this type of situation was back in 2000-2001. In the fourth economic quarter of 2000, the market peaked. But, what goes up must come down. Following this peak, the economy suffered a .6% decline for the first three quarters of 2001. Although this recession was very short and nothing too critical, it was a recession nonetheless. How did this situation happen? In March of 2000, NASDAQ crashed when the "Dot-com" bubble eventually popped. The dot-com bubble refers to the period in history when the value of stock of Internet based companies rapidly increased. This bubble eventually burst in 2000, greatly effecting the NASDAQ market. Some believe that the bubble burst when there was a weak income from Internet retailers after the 1999 holidays or when was a multi-billion dollar deal between Cisco, IBM and Dell. All in all, when dot-com collapsed, the market was crippled. Luckily for the American people, the recession was very minor and the economy went back to its normal self. However, this time around, we might not be so lucky. The 2001 recession only lasted for three quarters because of the collapse of the "Dot-com" bubble. Our current recession is attributed to far more problems. At this moment, we are dealing with the mortgage crisis, an expensive war, limited energy resources and much more. The fact of the matter is, the American people do not trust the economy like we used to in the past and this is greatly affecting our situation. Back in the recession of 2001, Bill Clinton had recently left our country in a surplus: "profits remaining after subtracting for operating expenses, taxes, interest and insurance." Even when the recession hit for a few quarters the American people were confident that our government was capable of returning the economy to prosperity. Nowadays, the people see all of the problems in our lap and simply don't believe that we are capable of fixing everything. Even if this isn't the case, at least during the 2001 recession multi-billion dollar stimulus packages weren't needed! I truly don't believe that trusting the current system will get us out of this situation because there are simply too many problems with the economy and drastic measures need to be taken.

Honestly, I think it really matters that we didn't name this situation as a recession until recently. The reason it matters is because naming it an economic recession will have it's positive and negative impacts on the American public. First of all, effects the decision making of the American people. If people had known that this situation was a recession right from the start, we might have been able to limit the damage that had been done. Some individuals may not have taken that loan from the bank or bought that gas-guzzling SUV if they had known that our economy was only getting worse. By waiting longer to name it a recession, many people have assumed that our situation isn't as bad as it really is. The truth is, our nation debt is in the trillions of dollars! Luckily, the naming of our problem might inspire the people to care more about the economy. All in all, calling it a recession has aided our country because people now know the severity of our situation and will think twice about making certain decisions. However, it has had a negative impact because now people might not trust the government as much as in the past. A poor economy points towards an incompetent government and in order to resolve this problem, we need the people to trust our government to make the right decisions. Unfortunately, the word "recession" frightens a lot of individuals and this leads to less trust in the government. My suggestion to Bush and Obama is to work together in order to gain the trust of the American public. The fact of the matter is, the people have only seen our economy get worse lately and it is vital that they see it can get better over time. So, the President needs to find a way to positively impact the economy, whether that be creating new jobs in some way or form or trimming off some of the national debt. This way, the public will see that the government can solve this problem and when Obama takes office, we will be ready to turn our economy around.

Sources:
http://www.investorwords.com/1647/economic_surplus.html
http://recession.org/
http://money.cnn.com/2001/11/26/economy/recession/
http://www.capmag.com/article.asp?ID=3691
http://ezinearticles.com/?US-Economic-Recession-History&id=998438
http://www.incontext.indiana.edu/2002/nov-dec02/spotlight.html

Economic Recession

A recession is a word that everyone seems to know but they don't know exactly what it means in terms of the economy. A recession is looked at by valuing the economic output of the country. When there is two consecutive quarters of decline in the GDP or Gross Domestic Product is considered to be a recession. The present government has now declared what we are in now a recession but this term should not be new to us. The last time our economic situation was considered to be in this state was only seven years ago. This recession was not very serious as it only dropped .6 percent and the economy was able to bounce back fairly quickly. One of the main reasons that people blamed the recession on was the terrorist attacks on 9/11. This event caused many businesses to have to close because of the slow consumer market. People were not buying things and that caused many businesses to suffer and eventually close. The dot com bubble was the other major problem that received much of the blame for the recession. The dot com bubble started off as a huge economic growth where people were moving their standard businesses and making them online. The online sector of the stock market grew substantially but it did not stay that way. The bubble "burst" in 2001 and contributed to a loss of many businesses and many people lost a lot of money in the stocks of these companies. People who used to run companies had to settle for much lower paying jobs. This recession however is not quite as severe and we most likely won't be able to get out of it as quickly as in 2001-2002. Whether or not President Bush was the one in office when the recession started, he was the one that was in charge to get out of it. President Bush created a 1.3 trillion dollar tax cut for the American people that he gave to Congress to enact quickly. It was his plan to help jump start the economy by helping the people that faced an economic bind. In 2001 he said, "There is a unanimity here that we need to help spur the economy … , that the warning signs are real, that people’s bottom lines are being affected, which hurts the ability for our American citizenry to find work." He was right and his tax cut did help in some peoples eyes but not in every one's opinion. Some people, such as Hillary Clinton, believe that the 1.3 trillion dollar tax cut was bad for the U.S. economy. In an article from 2001 it says, Acknowledging that the economy began to slow while her husband was still president, Hillary Clinton nonetheless said Bush's 10-year, $1.3 trillion tax cut was to blame. The tax cut was enacted in spring." There really is no way to be sure who is right, but something was attempted to get the U.S. out of the recession and something needs to be done now. A tax cut can definitely be attempted to help spur the U.S. economy but until it is put into action, it will not be known if it is a successful solution to the economic problem.

On December 6, 2008 President Bush said, "Today's job data reflects the fact that our economy is in a recession. My administration is committed to ensuring that our economy succeeds, and I know the incoming administration shares the same commitment." The fact that the current administration did not use the word recession until recently is not a big deal at all. Because a recession is when there are at least two consecutive quarters of decline in the GDP, there had to be some type of wait before something like that could be announced. On top of that, no one wants to use such a strong word like recession until the last possible moment they have to. That word not comes with such negative connotations that when it is used, it is a death sentence for the economy. The president also comes under a lot of pressure when a recession is declared because so many Americans and other people around the world are relying on him to get the country out of the mess. There is one reason that I can think of that would benefit the country in waiting to declare a recession. That reason is to keep the citizens optimistic about the outcome of the economy. Hopefully for the economy, people will continue to spend money if it is not declared a recession and help keep the economy from collapsing. Possible if a recession is stated, people may panic and avoid putting money into the system which then would be very bad for the economy. A way that it will have a negative impact is that the policies that the administration puts into effect will be lagging behind what is actually needed. These policies will not have as quick an effect or be as effective in getting the economy improved when it has been declared a recession. Policies to help just a slump will help the economy better then policies to help a recession. My suggestions for the President and President Elect are fairly basic. The only thing that I believe they should do is instill confidence in consumers that the economy will improve. This way the people will be able to work their way out of the recession and improve the economy themselves. Other then that I don't believe that tax cuts or other policies like that will help much. It is much better for them to instill confidence and provide leadership for the consumers.


http://www.incontext.indiana.edu/2002/nov-dec02/spotlight.html
http://articles.latimes.com/2001/jan/04/news/mn-8206
http://sweetness-light.com/archive/hillary-blamed-bush-tax-cuts-for-2001-recession
http://business.theage.com.au/business/world-business/bush-admits-us-in-recession-20081206-6snd.html

The collapsed economy

The term recession is not just simply a small slump in the economy but rather, as said by Cisco Systems Inc., “A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income, and wholesale-retail trade.” [1] This quote is very true, as we see people being laid off of work by the thousands now. A recession is a step away from a complete depression of the economy; that would signify that we had hit rock bottom. Our economy is said to be in its worst state of health since the 1930s when the Great Depression came around. It officially began on October 24th, 1929 with the "Black Thursday" stock market crash. At this time 12,830,000 people (or 25% of the working class in American) were unemployed. Much of it was blamed on former president Herbert Hoover.
Succeeding President, Franklin Delano Roosevelt (terms of 1933-1945) was the man to help save our economy and pull us out of our first major economic depression. He did this by putting together a highly successful economic plan called the New Deal . His economic programs such as Social Security (SSS) and the Tennessee Valley Authority (TVA) still remain today. A poignant point was once made by the affable yet strong FDR that “we must lay hold of the fact that economic laws are not made by nature. They are made by human beings.” [2] He relays to us that it was not God or nature’s turn-of-events that created the depression, nor did they make the rules for a crashed economy. It was our own faults, as human beings. He tells us through this quote, we put ourselves into this muddled situation so we can take ourselves out with a little patience and hard work. He was able to successfully do so near the end of his terms in office and America’s economic status was not nearly as unsteady as it was before.
It is very hard to tell whether president-elect Barack Obama, come January, will be able to start pulling us out of this economic chaos. FDR’s economic plan was completely unique to anything that anyone else had tried; he had even restored American citizens’ faith in the banks. Our economy has experienced very small false alarms every now and again ever since FDR was in office, but we’ve been able to pull ourselves out. In today’s economy it’s looking very much like what it had been a few years ago when FDR was in office. The sad part is that we have not hit the bottom yet, meaning we haven’t experienced the nadir of our economy so we don’t know how bad it will get. All in all, Obama’s plan theoretically has to work even just the slightest. Once our economy is at it’s lowest it can’t go any further can it? All we can do as citizens, is prepare for the worst (just incase) and hope for the best (that Obama’s plan will work out).
“That’s what recessions do. They come upon you all of a sudden... when you look back at history, you’re struck by how even-keel it is until the bottom just falls out.” [3] This statement in regards the economy having just been dubbed “in a recession”, was a statement I felt that most Americans have running through their heads. We all had an idea that the economy was in a recession before government called it that, but we didn’t really want to think about what would happen. So although it would have been good to have the warning a little earlier to prepare themselves for it (by saving money more, no excess expenditures, saving energy), it still scares us. The disadvantage of the economy actually being called a recession, is that it scares a lot of people. They don’t want to think about being laid off, business foreclosures, bankruptcy, or cutting back on their luxuries. It aids the country now so that Americans can prepare (although, like stated above, this warning would have been preferred earlier), but it negatively effects the personal lives and the stress levels that Americans deal with, by calling it a recession.
For president GWB now and the incoming president Barack Obama there are a few ideas I have that may not get them far but will logically be able to be utilized in a fashion that helps Obama to be able to “hit the ground running”. First, George W Bush, in his last month here should spend as little time as possible (I’m not saying absolutely none) with worldly affairs and should focus on what’s right inside America. The economy is the most important thing that the president should have to deal with. Without a good, stable economy there would be no country. Second, Bush and Obama should have a series of conferences with each other, one-on-one with each other about what should be done with the economy and only dealing with the economy. Thirdly, Obama should look back at the Cold War Era because it was seen as a time of good decision making. He should also reference what FDR did to pull America out of the Great Depression in the first place. Lastly, whatever Obama does, he should not bail out companies that do not deserve to be bailed out, or companies that would have the least affect on the economy if they went bankrupt. Obama should be very careful with where he puts government money.
Overall, the economy is very sick, hopefully not terminal, and it needs to be brought back to shape by someone (preferably the president-elect Obama) so things can return to what they once were and no one would have to worry about losing their jobs, money, homes, or businesses. No American should ever have to worry about such things.

[1] Cisco Systems, Inc. http://investor.cisco.com/glossary.cfm?FirstLetter=r. 1992-2008


[2] Brainy Media. http://www.brainyquote.com/quotes/authors/f/franklin_d_roosevelt.html. 2008

[3] Isidore, Chris. CNN Senior Writer. http://money.cnn.com/2008/02/05/news/economy/recession/index.htm. February 5th 2008

Recession: Not a new concept for America

First off, the term "recession" is defined as a period of reduced economic activity. According to recession.org an economic recession is "generally used to describe a situation in which a country's GDP, or gross domestic product, sustains a negative growth factor for at least 2 consecutive quarters." It can be identified by high levels of unemployment, decline in housing prices, decline in the stock market, and business expansions being put on hold. Presently, the country is displaying all of these characteristics, which is why the National Bureau of Economic Research formally declared the United States is in a state of recession. If the recession lasts for a long extended period of time, it can be classified as an economic depression.

The last recession that the United States experienced occurred in March of 2001 and lasted until November of the same year. The National Bureau of Economic Research determined that a peak in business activity occurred in the U.S. economy in March 2001. The peak date in March was a determination that an expansion that began in March 1991 ended in March 2001 and a recession began. The expansion lasted exactly 10 years, the longest expansion in the NBER's history. According to the NBER the U.S. economy was in recession from March 2001 to November 2001, a period of eight months. However, the normal economic conditions, much like we are experiencing today, did not satisfy the common definition of recession and has led to some confusion about the procedure for determining the starting and ending dates of a recession.
The NBER's Business Cycle Dating Committee (BCDC) uses monthly, rather than quarterly, indicators to determine peaks and troughs in business activity as can be seen by noting that starting and ending dates are given by month and year, not quarters. However, controversy over the precise dates of the recession led to the characterization of the recession as the "Clinton Recession" by Republicans, if it could be traced to the final term of President Bill Clinton. A move in the recession date in a 2004 report by the Council of Economic Advisers to several months before the one given by the NBER was seen as politically motivated. Nonetheless, as of early 2008, no further revision to the dates has been made. Using the stock market as an unofficial benchmark, a recession would have begun in March 2000 when the NASDAQ crashed following the collapse of the Dot-com bubble. The Dow Jones was relatively unscathed by the NASDAQ's crash until the 9/11 attacks, after which the DJIA suffered its worst one-day point loss and biggest one-week losses in history up to that point. The economy reentered an expansion in November 2001, thanks to homeowners willing to spend a good percent more on food and non-durable items. This increase in consumer activity helped lead America out of the recession and the NBER was able to identify the trough in the economy.

Unfortunately, the solution to the 2001 recession would not apply to the recession we are experiencing today. The biggest problems we are experiencing today deal with large businesses and corporations. Many of the big companies are going out of business or declaring bankruptcy. An increase in consumer activity would be somewhat helpful, but many smaller businesses are facing the same problems, which is why it is impossible for the American public to assist the larger corporations. Many Americans are declaring bankruptcy, foreclosing their homes, or entering into unbelievable amounts of debt. They need the same assistance that the businesses are receiving, and many people are cutting back on the small things that other people make a living off of.

My suggestion to the new President would be to first assist the lower class people and bring them back up to normal speed, because in doing that, consumer activity would increase. The recession of 2001 was ended because people were able to spend a little more on necessities, which helped up the consumer activity, which entered the country into an expansion. If the American people were helped, they would be able to help the larger corporations by buying more items, even if they are a little more pricier. This would save the large businesses and save the country from adding billions and billions of dollars to the federal deficit of over a trillion dollars.

Sources: www.recession.org
http://www.nber.org/digest/apr05/w10784.html
http://en.wikipedia.org/wiki/Recession

Recession 2007

According to the National Bureau of Economic Research, recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough" (http://www.nber.org/cycles/recessions.html). After a slight recession in 2001, the NBER declared that the U.S. had been in a recession since December of 2007.

After the longest period of expansion in record history, a recession came upon the United States in the early 2000s. According to http://recession.org/history, the "collapse of the dot-com bubble", the 9/11 attacks and other events contributed to a "mild contraction" in the economy from April of 2000 to October of 2001. However, according to the NBER, we had a recession starting in March of 2001 to November of 2001; which was "less than the average duration of recessions since World War II" (http://www.nber.org/cycles/recessions.html). Mark Feldstein, CEO of NBER, told the Boston Globe that the last time we were ever in an economic situation this bad was back during World War II (http://www.boston.com/business/articles/2008/03/15/recession_is_here_economist_declares/). Many would say that this recession did not have a full recovery as many were still unemployed or had to take a lower-paying job.

President George Bush and Vice President Dick Cheney both agreed that they had inherited the recession when they were inaugurated in 2001; that the recession had been the fault of former President Bill Clinton. In response to this recession, President Bush called on Congress to quickly pass an economic stimulus – consisting of assistance to unemployed workers and another round of tax cuts – so that he could "sign it before Christmas" (http://money.cnn.com/2001/11/26/economy/recession/). The package was passed in the House but not in the Senate as the former Majority leader Tom Daschle said that the package "promoted by President Bush appears dead in the Senate" (http://www.voanews.com/english/archive/2002-02/a-2002-02-06-11-Congressional.cfm). However, on March 9, an economic stimulus package was finally signed. In an article on the White House website, the Council of Economic Advisers wrote that President Bush’s 2001 Economic Growth and Tax Relief Reconciliation Act was what gave Americans "a greater share of their own money to spend on" whatever they may prefer. They also said that it "softened the recessionary headwinds in 2001 and…helped to put the economy on the road to recovery" (http://www.whitehouse.gov/cea/TaxReliefActUpdate_Feb02wp.pdf). Some people however said that it was the $1.35 trillion tax cut that gave our economy the final push into recession.

I do not believe that tax cuts will work this time. Although it may give Americans more money back into their hands to spend, I feel as if they would be too scared to spend it after how the media has portrayed this recession and after the incomplete recovery from the 2001 recession. In addition, the constant bailouts of companies do not really give the people the sense of security that they can spend their money in stores or invest in stocks. Others are waiting for the last minute when stores are about to close so that they can get the cheapest prices possible. A tax cut would just contribute to the growing deficit. With the economy in the shape it is in now, even if money were to come back, some companies would not be able to borrow the amount of money they need to hold back from filing for bankruptcy. Then there would be no more stores to spend money at or stocks to invest in. However, it also is true that when people get checks back in the mail, they tend to spend it within the year (depending on how much rebate they receive). As costs for everyday commodities are going up, so does bills and debt that people have which is what people should be spending their rebate checks on.

The fact that the recession (beginning in December 2007) was officially declared on December 1, 2008 confused me. I had no idea why they would declare this slump a recession a year after it officially began. Then, after doing some research for this, I figured out that "the official designation of recession may not come until after we are in a recession for six months or even longer" (http://recession.org/definition). Most people probably still do not even know that and looking at blogs and at comments readers left, they seemed as if they had no idea that recessions are usually declared months after it has begun. Also, I do not think that this declaration was much of a shock to people. People had been feeling the slump already. What they were more curious about was whether we were on the verge of entering another depression or not. I think that the extra time that is given for a recession to be named gives NBER time to accurately think through whether the country is truly in a depression or not. If the recession was declared earlier, this fact could have been a benefit to the democrats in the presidential race. As President Bush stated that the recession in 2001 was former President Clinton's fault, President Obama could have stated that it was President Bush's fault giving him more of an advantage although it would not have had a tremendous effect. If a recession had been declared immediately, the people could have gone into a bigger panic which could have had a greater influence on the markets. A negative impact could be that for those people who do not know that recessions are declared months after it begins, they could lose a little faith in the government to keep them informed. However, I do not think that this was the case as many already knew that the economy was on a downhill slope.

My opinion is that tax cuts are not the methods to follow to get out of this recession. That only deepens the hole we are digging ourselves in for the deficit and also for the other reasons stated above. My suggestion to the President and President-elect would be that searching for alternative fuel and gaining energy independence is a step in the right direction. That would help the economy while also helping the environment in the long run. Although I do enjoy the cheaper gas prices, that only stimulates the people to use more gas to travel domestically because airline prices are so high. That could hurt the economy in the future. Energy independence also keeps the money within the country so that the government does not have to continuously pump more money into the economy to cause a rise in inflation. Also, while bailing out companies do help, it should be done with extreme care so that the companies will not take the money for granted and that they follow all the agreements made in exchange. While the U.S. is one of the largest markets, foreign companies are also expanding. They are using the business of the U.S. to grow rapidly which is slowing the growth of our nation down. Therefore, whether this is a good idea or not, there could be limited trade or limited bases for foreign countries once we have started to become more independent.

I think that in general, this recession could also be good for us. With so much change going on the world this could bring some pride, hope and unity to the country. As one town struggles, the whole nation struggles. This recession is teaching people to save and while the gas prices were high, people were learning to car pool or take public transportation.

Economic Slump

The present administration has now named the US economic situation as a recession. What does that term mean? When was the last time that the US was in this situation? How did the US get out of the recession last time? Will it work this time? Why, or why not?
Does it matter that the administration did not name this slump a recession until recently? How does it aid the country to do so? How may it have a negative impact?
What are your logical suggestions for the President and President elect regarding this situation?
Required-3 quotes and sources
2 paragraph minimum
Due 12/17/08 12:01 pm est