I never bring it up, but many of my friends and family members and fellow bloggers keep bringing up the economy, and mentioning that we are in a recession and, in a few instances, a depression.
Two of my brothers over the course of the past few weeks have told me that the economy is so bad right now that we are in a depression. I never said anything either of these times, however much I wanted to refute that claim, because I am no expert on the economy.
So, are these people right? Are we in a recession right now? Are we in a depression? If not, then why do so many people talk as though we are?
I can answer the later question easily: because there is an election looming, a republican president is in the White House, and the media will do everything in its power to make that president look bad, and the best way to do that is to plaster every little piece of bad economic news all over the the place. The old saying goes, if you repeat something often enough, people will believe it, no matter how true.
It is possible that we could be headed into an economic recession. However, and technically speaking, we are not yet in a recession. According to InvestorWords.com, a recession is "a period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters."
As of right now, there has only been an economic decline of one quarter.
That said, according to various news outlets (here's one random one)there is a growing number of economists who now believe that the U.S. is headed into a recession. That number has grown from about 25% in September, 2007, to 45% now. Still, 55% of economists think we are not headed into a recession.
Still, most economists expect there to be an economic slowdown this next year whether or not we enter a recession. And, still, most economists, even among those who say we are definitely headed into a recession, believe it will be short lived, perhaps similar to the recessions of 1991 and 2001.
Still, when it comes to the economy, nobody really knows. Most of what we know about the economy is simply based on theory and a historical analysis of past economic events. So, there is a possibility we could go into a recession, and there still is the chance we could fall all the way into a depression.
However, as of right now, despite the indicators, despite the job growth falling, and consumer confidence plunging, despite a slow rise in unemployment and inflation, we are not in a recession yet, unless someone wants to come up with a new definition.
And, we are definitely not in a depression yet.
However, by watching the news, and listening to the presidential candidates, you'd think we were in a full blown depression. No wonder consumer confidence is so low. No wonder so many people are mislead into thinking we were in a depression.