MTC brings up the fact the the technical definition of a recession is "a decline in the GDP for two consecutive quarters." Great -- but any economics teacher worth a damn will quickly point out that by that definition the economy can be in a recession for at least six months before a recession is officially dec
lared. The current discussion revolves around whether the U.S. economy is currently in decline and if that decline is dramatic enough to continue for the foreseeable future. No one wants to wait for the latest GDP data to come in ... People want to know if they're fucked now.For those folks who make a living by securing loans from financial institutions, life has sucked since about September when the subprime market imploded -- and it's not getting any easier. The recent rate cuts may help in the short term, but the problem with the credit crunch is that it's institutional. That's going to take some time to sort out. But pretending like everything's fine right now isn't helping the situation at all.
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1 comment:
Thanks for the link.
I hope you understand from my post that, in one sense, my desire is the same as yours, is there a way we can determine in advance that things are going south? And is the GDP and the other one the best ways to tell that the economy's gone south?
My thought is should we depend on subjective feelings (i.e., my life sucks, so the economy must suck, too) or objective facts. Of course, we want to be objective, but then what do we use?
Anyway, good thoughts and I certainly agree that by the time we find out we're in a recession it's too late to prevent one.
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