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