Sunday, February 9, 2014

When does a recession stop?

Depends who you ask.  Economists call a time of falling economic activity a recession.  They used to call it a depression, but after the great depression of the 1930's they decided to use a less scary word.  Anyhow, a recession is over when things stop getting worse.  In the case of the current great recession (or Great Depression 2.0) things stopped going down hill back in 2009.   So economists will tell you the recession is over.  The Obama administration loves this interpretation, and the newsies (Democrats all) have picked this up and spread it around.
  Trouble is, things haven't gotten much better since 2009.  Economic growth has been very low, 1 or 2 percent, less than population growth.  When the economy doesn't grow as fast as the population grows, everyone gets poorer.  You have more people and less stuff, and so people get  less stuff.  That's been the story since 2009, five years ago. 
   Ask a typical citizen when the recession is over.  He will tell you it's over when things are back to where they were before the economy went down the tubes.  When he has a job again.  By that standard, and it's a reasonable standard, we are still stuck in Great Depression 2.0.

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