The Recession Is Over!
Newsweek, as well as other news outlet, have proclaimed that the recession is over!
Woohoo! Time to Party!
This is the classic economic voodoo. Paul Krugman, asked on ABC’s This Week on Sunday, said he thought the recession may be over as well. Well, goody for you.
What they don’t tell you is the ugly underbelly of the economy.
Almost all economists agree that some parts of the economy have hit rock bottom. The stock market, hitting a floor in March, is now up 44% up for the lows…though even since January. Home sales have risen for three straight months. Of course, home sales usually rise in spring and summer, but oh well, let us jump for joy. Simply, when economists proclaim a recession over, they’re celebrating a technicality: they mean economic output has stopped contracting. Bully for us.
Here is the major problem: Unemployment is still skyrocketing. More than likely, unemployment will rise over 10% before the end of year, and may come within shouting distance of 11% next year. Most feel that it will peak sometime early in 2010. Nouriel Roubini, NYU Economics Professor most heralded for predicting this current recession, said it best: “I see 1 percent growth in the economy in the next few years. It’s going to feel like a recession, even when it ends.”
Still ready to party?
Here is the other side. Obama spent $787 Billion in his stimulus plan passed earlier this year, and increased government deficit spending to all-time highs, in order to confront the recession. Whether this will have any positive effect will take years to see, but so far it has accomplished nothing. The repercussions however will be felt for decades. According the White House itself, Obama’s budget will doubt the U.S. debt by 2016. Actually, that is understating it. It will do that, if the economy grows at 4% or better from 2010 and onward. No ecnoomist, even the valiant Krugman, feel that is anywhere close to realistic. If the economy grows at a 3% clip from now until 2016, our budget defict could double by 2015 or earlier. This is debt of unheard of levels.
Best case scenario is that unemployment peaks by March 2010 or so, with 2-3% growth next year. And that is if all goes well, and that massive tax cuts now being considered have no negative effects on business.
Yeah, I don’t feel like partying either.
Odd… from 2000 on I hardly heard much good about the recession or about moves in the stock market. To listen to the mainstream media one would think that the eight years of Bush we lost years. Now, we are 44% off the lows of March and the recession is over?!? Oh, so are these ‘burger flipping jobs’ that will be created like during the ‘Bush years’? No, worse than that this is a largely jobless recovery yet the cheerleaders cheer because of party loyalties rather than be honest about the real stories in the news.
This is disgusting. The other shoe has not dropped yet. Rising unemployment is a disaster for this entire economy since most of it is predicated on consumption which is based largely on consumer spending. Consumers were encouraged to be fiscally irresponsible. Programs put in place recently like ‘cash for clunkers’ are also irresponsible in that they encourage all the costs of a new automobile over the relative lack of cost of maintaining an older vehicle. Unlike a home (which many are under on mortgages) cars seldom (almost never) appreciate within a reasonable timeframe. Which of you naysayers to this own a Shelby Cobra?!?
There was a terrible failure of the Bush years in that Government did not shrink. This obligation of financial doom must reverse as the size of the government is far too large for even prosperous times of taxation on prosperity. Look at all the states and see the tax proposals to pay for the thrifty spending stupidity while times were good. Look at the worst example int he nation: New Jersey run by Goldman Sachs disaster Jon Corzine (now revered as a rising star in the Democratic party).
Government waste must stop. Government programs must become efficient. Government must shrink. Schools must become accountable for a proper education of our children. Parents must oversee the education at home and demand more for the horrific outlay of tax dollars in every district dominated by school spending.
[...] or two, a number of sources have been talking about seeing an end to the recession. It seems the so-called experts have been clamoring for the “recession is over” party. The problem is, ordinary folk don’t see it that way. From the Common Peoples Source for [...]