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/