The United States is clearly not in its best economic condition but my question is how serious is the current economic downturn? If I am to believe the media and conversations with people about finances, budgeting, etc. the situation is bleak. I, however, am skeptical that the situation is that bad and believe the current economic condition is just another phase that all economies go through, including the United States. Does the 1930's or 1970's ring a bell?
Does higher prices and a bear market really create a bad time in and for the United States? I surveyed several people at random ranging in ages from 22 to 62 and all agreed without a doubt that the economy wasn't good and 70% of those surveyed have already cut-back in primarily going out to eat and driving due to high prices. Some surveyed even admitted that discretionary income is currently a luxury and bills were getting hard to pay, 60% believing the U.S. was in a recession. The other 40% believe we are close to a recession or simply in a restructuring phase. By definition Definition of Recession the U.S. is not in a recession because two consecutive quarters of negative GDP growth is required for such a condition to be declared officially. GDP Growth Simply put the economy is definitely not good but is that really important?
Finally I asked whether or not those surveyed felt their household was blessed. Every person, regardless of sacrifices or financial struggles, didn't hesitate to say they were very blessed. While the nation may be experiencing a bear market with many things from oil to employment are looking tough we still live in the United States of America. This is a nation of tough individuals who were guilty of treason in 1776 to form this great nation, survived a civil war, a great depression, and even politicians (scary uh?) . If we can fight through all these battles (especially that last one), we can certainly fight through a rough economy for a few years all we have to do is quit relying on the government for our every need and take a lesson from our great nation's founders. Declaration of Independence
2 comments:
A recession is NOT defined as two consecutive quarters of GDP contraction. What a recession actually is, according to the NEBR, the entity in charge of dating such things, is as follows:
"A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, 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. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades. As formally defined by the NBER, it is the "Peak to Trough decrease in business activity." -The NBER’s Recession Dating Procedure
You will note that nowhere in that formal definition is there any discussion of consecutive quarters of negative GDP.
There's more here: Recessions Often Begin With Positive GDP Data
http://bigpicture.typepad.com/comments/2008/05/positive-gdp-re.html
Yes, your point is well taken. I instead chose to use the definition for its objectivity and simplicity. The main point of the post was to say that America was not built by a big government, it was built people. The definition I provided is a widely accepted simple definition and worked for the purposes of my post. Thank you for the input.
Post a Comment