Topic of Debate - Recession?
Recession - Are we in one or not? Will we technically record recession or not? Does it matter, since it's clear Americans are suffering as if we were in recession anyway? We point to the recent unemployment rate rise as evidence. Please tell us what you think through the "comment" link below. Readers outside our site MUST visit the website to comment.
This week's topic of debate is recession, are we in one or not. Will this economic downturn record two quarters of economic contraction to technically qualify as recession? Many economists said we were in recession in Q1, but GDP was recently revised higher for the period to +0.9%, nearly a full point from economic contraction territory.
Perhaps international demand for cheaper American goods, while at the cost of dollar value, might create illusion of growth while eating away at American wealth. Perhaps this will, however, help keep the American economy technically out of recession? Also, with Q1 positive, and Q2 expected to benefit from the economic stimulus package, might the economy hold up until organic demand naturally ensues. Interest rates have been reduced, and as long as inflation does not undo the work of Bernanke & co. perhaps, organic economic demand will arrive just in time to keep us afloat.
The Federal Reserve estimates that the economy will avoid recession, but could "contract" for a quarter. The Fed also sees economic growth accelerating in 2009. You already know what "The Greek" thinks. I expect the economy would drag throughout the year due to serious broader inflation (broader than food and energy), and that we face serious risk of entering technical recession. If war begins with Iran, I expect worse than recession. But, this is not my space here, it's yours. I want to know what you think. Please record your thoughts for the community and "The Greek" to see. Click the "comment" link below and get started. If you are reading this somewhere other than the site, you must visit our website to comment.
Topic of Debate Archive
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posted by The Greek | 8:39 AM
2 Comments:
Of course we are in a recesssion. Housing is dragging everything down with it. Those GDP numbers are questionable at best. With Gas prices 3 times what they were 2 years ago, a gallon of milk, loaf of bread and dozen eggs double what they were, I don't care how cheap Microsoft Windows is, this is causing a huge financial burden on most working class americans. I see 3rd and 4th Quarter negative GDP growth---there is no way Americans will shop the way they did last year. 70% of GDP is consumer spending. Consumer has negative home equity, maxed out on credit cards, wiped out their savings many moons ago, and can't finance an SUV for 7 years anymore.
On an optimistic note, once we have the Great Public Works Project of 2010, and build some real nuclear infrastructure and alleve Americans of our dependence on foreign oil by using electricity from nuclear power plants built in the old rust belt of America---demand for oil will drop back down to reasonable prices, and Americans will have already become accustomed to smaller cars, by 2020, we will have some other bubble the Federal Reserve can let grow, and grow, and grow, and then bail out Wall Street for taking on too much risk AGAIN!
No matter what the technicals say, we are in a recession. The mentality of people out in main street is clear, WE CAN'T AFFORD THE HIGH PRICES!
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