http://biz.yahoo.com/ap/080307/economy.html
In February employers cut 63,000 jobs in February, the most in five years. This appears to be a vivid sign that our country is extremely close to heading into a recession.
According to this article, the Federal Reserve plans to increase the amount of loans made available to banks to $100 billion in order to provide some relief. However, with the large increase in oil and gas prices along with this employment drop, it seems that a recession is inevitable, or is happening already.
Subscribe to:
Post Comments (Atom)
7 comments:
I see the opinion on recession, but my question is: its the lowest in five years? Which means that five years ago there was a larger job cut in the market. My point is that five years ago we did not see a recession like we see now and there was a larger job cut. So, how can we use this as a way of predicting a recession, if there have been lower rates, especially when the economy seemed to be better. Are they jumping a little ahead of themselves?
Due to me having trouble focusing at the moment I didn't quite read the whole article but I don't see this plan being that good of an idea in the long run. If were in a recession, even if we lend more money the chances of people being able to pay back this money is not that good. The money should be put into something that will jump start the economy.
Everyone keeps screaming about a recession that's coming, and I actually think that's what's causing the recession. It's just consumer expectations. Everyone keeps telling us that the economy is going down and prices are going up and we're going to be so much worse off in a few months, so everyone starts saving money. If everyone's saving money, nobody can spend it, therefore taking money away from the economy and leading to...recession!
Didn't he talk about this is Naked Econ?
I agree with savannah, it seems as though our government at this time are really into the quick fixes, and is really not looking at the big picture. People are going to be able to pay rent for another month or two due to these loans, but is that helping them in the long run. I do not believe so, if anything it is just giving them a false sense of hope.
Caitlin makes a good point. However, I do think that this country's economy has already begun to recede, and keep receding due to gas prices. I also agree with Savannah in that the idea of the government giving people money is not good. Inflation is already high enough that this money will simply hold the amount people consume constant for a short while and then it will drop again.
I don't know about anyone else, but i know that in my house, the 'jumpstart' money is going for something that we already bought (i.e. the car). So it seems that we are being terrible Americans and not boosting the economy, although it does take a car payment or two off of our backs.
With the average American having 15,000 in credit card debt (is that the right number?) I can't see many people deciding that a new tv is worth staying so far into the hole when you have this "free money" coming at you.
A recession is defined in one way - is GDP negative? Not falling, but negative (as in, is the economy shrinking?).
GDP has been falling for a few months. The trend is showing that yes, we are heading for a recession. But...the numbers don't show it yet.
And Lydia is right - people keep talking about how terrible the (non-existant) recession is, so others panic and don't buy stuff, which creates...a recession.
The stimulus package is about politics, not economics.
Something that we should REALLY worry about is the trend towards higher prices (inflation) and a slowdown (declining GDP). Usually, in times of inflation, the economy is growing, not slowing down....yet, we are. The things the government does to stop inflation would make a recession worse. The things the government does to stop a recession will make inflation worse.
So...what can be done?
Post a Comment