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