Wednesday, October 27, 2010
Weaker Recovery
The recession officially ended in last Summer but when we look at the recovery pace it is not as expected. The real GDP is growing but at the declining rates over the quarters. We have not returned to the growth levels that we had before recession started. What do all these indicate? Is it suggesting for double-dip recession? You may want to read this post and share your opinion.
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After reading that article I still have strong hope that our economy will not fall into a double dip recession, however, things seem to be very bad around the United States. I believe the government has done an ok job in getting our economy on the right track, but they must do some major work within this next year or two within the house and president obama.Now considering the Republicans have taken the majority and gained more seats. Furthermore, the housing market is horrible, I have seen coverage on the news channels reporting it but also have witnessed it first hand in my surrounding community. I've seen people literally just get up and walk right out their front door to never return again. The fact that people are just leaving their houses and having the banks take over is really bad, not to mention how many houses you see up for sale when driving in your local communities. I do see a strong shift in people starting to save money, but its hard when so many people are in debt and trying to make up for it in these tough economic times.
ReplyDeleteJoel Ferguson
Econ
Reading this article has confirmed my view that we cannot expect the government to fix everything. The cause of the recession is not as the article mentioned increased interest rate, as a result lowering the interest rate did not bring out the solution. I believe that currently we should concentrate on saving and increase the saving rate, even if that lower the real GDP; in the long run it would benefit the economy. The recision is caused by people spending money they do not have so saving seems like a good idea to me.
ReplyDeleteLeyia Getachew
Am not sure if we are heading for a double dip recession; however,I do think that with consumers spending less, and the policies that are put in place in regards to recovery are not as effective as they should be, however I do understand consumers are trying to cut back on their spending in order to save more but I do wish that hopefully soon the economy will recover.
ReplyDeleteStacy
I believe the article is very well suggesting a double-dip recession to occur. The article states "This recovery has been much weaker than previous ones because of fundamental differences in the cause of the downturn and in the policies chosen to achieve recovery.” Previous downturns were caused by the central bank’s effort to prevent inflation by increasing interest rates. When the central bank succeeded at this, it reversed its actions by lowering the rates; this caused the economy to bounce back. The problem, this time, is that the downturn has not been caused by higher interest rates, and reducing those rates has not caused much recovery also. Even the fiscal stimulus administered by Obama is not good enough to aid the recovery. The stimulus programs are unfortunately coming to an end, as the article says, and therefore I believe that we are in a good chance of heading into a double-dip recession.
ReplyDeleteReekan Honest
I do not believe we are heading to a double dip recession. Recessions take time to recover from the economy still seems bad but if the GDP is increasing then techniclly we are in a period of recovery. Recovery, however, takes time years even to get back to where the economy originally was.
ReplyDeleteElisabeth Ekkel
From my point of view, I don’t believe the economy is repeating another cycle of the recession. From previous readings on economic fluctuations, I believe our economy is currently in s stage known as the trough. During a trough period, economic growth is at its lowest point and increases at a slower rate. Once this stage is over our economy will then shift in an expansion period which will cause a increase in out and employment.
ReplyDeleteAfter reading the article, it is clear to me that the government already has a lot to deal with. We all think that the government is slacking but honestly after reading the article we cannot expect for the government to fix everything. I do not believe that we are having a double dip recession. Recessions take time to overcome. You don't bounce back from a recession in one day. It takes months and sometimes it takes years. As a country that is something that we have to realize. Change does not come over night. It takes time. So as you mentioned the Real GDP is increasing but declining by quarter. Obviously things are looking up for our country if Real GDP is rising. Like I mentioned before, recessions take time to recover from. At least our real GDP is increasing and not declining.
ReplyDeleteBritni Streets
Reading the article, I don't agree that we are going in a double deep recession. I think that it takes time for the economy to recover from the recession. But I think it is fundamental that the housing market needs to be fix before we can start seeing improvement in the market.
ReplyDeleteFirst of all, recessions take time to recover, it is not going to happen over a short period of time. So i do not think we are heading to a "double dip" recession. If the GDP is going up then wouldnt that be a period of recovery? I would believe so. However, a full recovery could take a period of months maybe years for the economy to go back to how it was origonally.
ReplyDeleteafter reading this article it seems as if we are in a trough. because the growth rates are not where they are suppose to be at.things have become so bad that people are not able to survive on the money that they are making. so people have to go out and get 2 and 3 jobs to make things work. i do not think that we are headed for a double dip recession because things are better than what it was when we were in recession.
ReplyDeleteErika Brown
After reading this article, I do not believe that we are headed into another recession. GDP is increasing so that means that our country is in a period of recovery. Although it may seem as if we are as bad off as we were when we were in a recession, it is not the case and we just need to understand that recovery in every sense takes time.
ReplyDeleteThe damage was quite high. Pretty much every country in the world did suffer of the global crises. It is true that the recession has ended last summer, but we still just passed 6 months or so. The government did an enormous effort, pretty much every government in every wealthy country had to protect its own by pumping some amount of money that will somehow save the economy, taking a very good example GM & Ford. Both had gone into bankruptcy.
ReplyDeleteTaking the view from a wider point, the US is in the recovery phase still, recovering from a very huge impact into the economy wouldn't be that short or as easy as it would sound. Im my opinion, it will take a while. Looking at the bright side, the US economy is back as well as the GDP is still increasing by the years, but getting to the peak where the US was, it will surely take some time I believe.
Abdullah Alessa
It is true that we still did not see a clear vision of our recovery from the recession but i do not think we are going to face double-dip recession. it takes time for any economoy to recover completely from its recession so as it has just been declared that recession has been ended we just have to wait to get the economy to be fully recover from this situation.
ReplyDeleteI do not feel that our economy will slip into a double dip recession. We just came out of a terrible recession so terrible that it will take some time to completely recover and see the change. the economy is changing we just can not see it because the economy completely hit rock bottom. maybe in a few more years we will start seeing the change.
ReplyDeleteNataiya Taliaferro
These facts are indicating that the consumers are spending more thats why they say we are out of the recession. But I believe they should base it on unemployment and not the spending amount.
ReplyDeleteTalya Arrington
I think that since the recession is over 'on paper' it's not really over until the American people see that they can go out and spend more of their money at local stores and the banks are giving out more responsible and sensible loans, then the recession will be officially over and we, as Americans, can get back to what we like to do best, whatever that may be.
ReplyDeleteAdam Kirvan
I don't believe that we are heading into a double-dip recession. It's just that it is going to take more time to recover from a recession, it's not going to be fixed in one day. It takes time. And considering how long we were in recession its recovery pace is going to reflect that. It's also a good sign that the GDP s growing, it shows us that we are in a state of recovery, we just have to be more patient. I think that if there is a rise in the employment rate, then it should help our recovery as well. It seems that it would be sort of key, this way more people would have jobs, meaning more people would have money flowing into the economy, which in turn will help out with the recovery.
ReplyDeleteBindiya Patel
I don't think we are going into a double-dip recession. However, people do need to start consuming less and saving more. But we have been in recession for a while, so I believe it will take more time to fix it. If real GDP seems to be increasing then I believe we are heading towards fixing the recession problem.
ReplyDeleteAcoording to me,there would be no double-dip recession. As time period of last recession was long, so it will take some time for the economy to recover from this recession. It is the intial phase of recovery, so after some time period or years, econoy will reach the point where it was before recession
ReplyDeleteKena Patel
These rates show that the programs that are being implemented are not working. The economy has not gone back to its normal state but as far as a double-dip recession, I don't think that is going to happen. The government is aware of the financial problems and is currently trying to fix it. Once they find a program that will balance "the books" then we will start to see a rise in real GDP. Until then, we have to take advantage of the savings programs and pretty much hold on to our money. The recession technically isn't yet. At least not until the real GDP starts to rise at a steady rate.
ReplyDelete--Ann Esshaki
Personally I think it has allot to do with consumer confidence. With the constant talk of hard times ahead and a high unemployment rate people are not going to go frivolous spending. I know that personally I am putting as much away as I can because who know how long it will take me to find a steady source of income after collage. Is this a good thing? I think for the short run it stinks because people are not pumping money into the economy but I feel in the long run people who are growing their savings to %6 and higher are creating investment opportunities for the future. I plan on spending that money I have saved on goods further my chances of making more money in the future or at the very least give me a buffer until I find something that does. Consumer confidence takes time to build and consumers just got a huge punch in the gut. Once we catch our breath and feel safe to spend those percentage decreases will start to grow again it just may take some time.
ReplyDelete--Ari Jacobovitz
The end of a recession does not automatically mean that the economy is back to what it use to be. Now people are scared to spend money fearing another recession. Hence, the savings rate increasing. More people would rather put their money in savings than spending it. Which is the reason the U.S. economy is not back to where it is expected to be at this time. Sooner than later people will realize that the economy is out of the recession and they would go out and spend money -- stabilizing the economy.
ReplyDeleteAjdin Alic
Some people in the United States don't even know that the recession is over. Some people try to blame the government for what has casused the recession to occur. Others who know that the recession is over are just not looking for jobs because after being rejetced so many times theres is no need for them to keep looking. This is why the pace is moving so slow.
ReplyDeleteI thought the article was very interesting. I also think there is a good possibility of a double-dip recession. As the article stated, banks changing interest rates did not cause the recession, so adjusting rates would not bring us out of it. Relying on the American people to consume more is not a good plan to improve the economy. Personally, if the economy were slumping or in a recession I would be very cautious with my money and would not spend spontaneously. I believe the mindset of some people is to save more and consume less when the economy is in question.
ReplyDeleteThis recovery has been a great deal weaker than previous recessions because the right policies were not selected to accomplish a recovery. Households lost a large amount of wealth and witnessed a distressed financial market. This makes citizens take less risks, save money, and be skeptical to spend money which in turn slows the economy.
ReplyDeleteAnthony Vitale
I don't the economy will go into a double dip recession. I think that the economy is hurting because of the 700 billion dollar bailout. With the war in Iraq being over that allows a lot of government spending to be cut down. Many billions of dollars will be saved because of that. The war in Afghanistan still costs a lot money, but by the time the 700 billion dollar bailout makes the interest back the economy will be able to improve. The economy may not recover very fast ,but i don't think there is going to be a double dip recession.
ReplyDeleteWell, after reading this article, I can reason with you, as you say that the economy is growing but at the declining rates over the quarters, and has not returned to the growth levels that we had before recession started, this is so because of the President's stimulus plan.... I believe in the President's stimulus plan that it can revive the economy, but people have to be patient with the stimulus to kick in fully because the stimulus is aimed at a long term economic growth rather than a short term growth and then another recession.. Economic patience is the new word!!!!!!
ReplyDeleteBrittni Crawford
ReplyDeleteyes, I do believe it can become a double-dip recession. The recession was recovered to soon, putting the economy in more of a budget deficit. that soon can send the economy back in a recession. When you are putting health care, taxes, war and other policies a side to try and rebuild an economy can cause more trouble and make money spending tight for families.
Brittni Crawford
For many reasons, I do not believe that our economy is headed for a double dip recession. It is evident that the government is not able to fix everything, but they can be a great help. It will takes efforts of the federal and local governments AND U.S. citizens for the economy to get back to where many are not struggling. One local example shows me that our economy is even doing better. Everyone knows Detroit as Motor City. Just last year, both Chrysler and General Motors needed the government to bail them out of their financial issues. This year, Chrysler hired over 1100 new employees and launched a new vehicle. This vehicle has been "selling like hot cakes" causing more hours and overtime for employees meaning more money. Early last year Chrysler wouldn't have thought about hiring anybody in the situation they were in. Today, sales are up and continue to increase. This is proof that our economy is on the up and up.
ReplyDeleteAstrit Mehmeti
ReplyDeleteI believe that a double dip recession is very unlikely because the government knows that will cause an enormous damage to the economic infrastructure of this country, therefore they will do anything not to let that happen. The government realized that decreasing the interest rates alone generated a small boost in the economy increase but it doesn't help it in the long run. Thus, now they know that they have to attack the problem from all different angels at once in order to succeed. They will influence the general population to spend more by offering more jobs, they will at the same time lower interest rates again and also cut taxes in order to give the general population more money to spend. When all these elements are activated at the same time, most likely we will see a positive expansion and GDP reaching that point where it was when the economy went into the recession. I don't see what else they could possibly do to get the economy out of the mess it's in. It just took the economists a little longer to realize the kind of problem they were dealing with. They also took long enough to study it, learn from it and discover new ways to fix it. I'm sure that by know they should know exactly what they are dealing with.
We all know that something still needs to be done to help our economy. The stimulus plans that the government issued has helped out the American economy. But it seems that without those stimulus plans, the economy declines. When the stimulus plans were coming in, I did not qualify. I think because I was still a "dependent" or something. I was talking to my dad saying how I wanted a stimulus check to spend. He said that it would be smart to give the money to younger kids too because they could find things to spend the money on very quickly and this would help put more money in the economy. Unlike a lot of adults who would save all or most of the money. I think the government should give out more stimulus checks and give them to younger kids,like my age too.
ReplyDelete-Eric Platte
I don't think that there is going to be a double dip recession because the government is trying to fix the problem right now. It will just take some time. Since the last recession was long it will take a long time to recover form.
ReplyDeleteBina Patel
Alan Greenspan said that US GDP growth of 2.5-3% is not great and needs to return to a balanced economy. “Coming out of recession as deep as the one we have been through, we have not had except for the big inventory swing. Essentially what we need is to get back to a balanced economy. Until and unless we get that risk sense down and get a sense of more normality, rather than deep seeded fear this economy is going nowhere,” he explained.
ReplyDeleteI disagree with him that US GDP growth of 2.5-3% is not great!! I believe the gap between the real GDP growth and projections should not be an indication of the recovery since saving which slow GDP growth is not bad especially during recession times where the image is not fully clear.
Ahmad Alkadeeb
The fact that the GDP is growing is a good thing, even though it is taking longer than expected. Like, look at it this way, if you tear your ACL there's a recovery time. Some people recovery faster than others but the healing does take place, even if if takes longer than expected.
ReplyDeleteBecky Sweeney
Could there be a double-dip recession? Yes. Could thing have gotten worse than they did? Yes. Do I believe this will happen? No.
ReplyDeleteThere are too many eyes on the situations with people across most of the government ready to act in case things start to sway in the wrong direction. Only a large catastrophe could cause a critical failure rushing us back into a recession. An example of this would be the fall of the credit market (the cause of this past recession) but this too is being monitored and new regulations are being applied to prevent it from failing in a similar manner. Another possibility would be other nations calling for repayment of money lent to us but this again is unlikely as doing so could cause another global failure affecting our lenders adversely as well.
Unemployment is still relatively high but the CCI for the US is showing an upward trend and retail sales are up as compared to last year.
-Rafael Schaffa
A double dip recession is very possible. Although, the government has been working on recovering from it and it can't happen over night. It is going to take a long time before we start to see any difference which makes it seem like we are still in/heading back into a recession. I believe that there has to be something more the government can be doing because if they don't we will be stuck in this place for a long time if not worse.
ReplyDeleteIt's possible that we could but I don't believe that we will have a double dip recession. After having a recession like the one we just had I believe that it will take some time. Even though that the rate that GDP is growing is declining it still is growing though. I think its just going to take longer than what we expect for it to grow back to what it was before the recession started.
ReplyDelete-Ryan Katz
I think this could very well mean we could go into a double dip recession because the economy doesn't seem to be getting any better. however with all the economists who are developing new methods of how we can avoid experiencing another recession I think it is very unlikely that we would go into another recession, and that they would learn from past failures of what not to do.
ReplyDeleteKim Brooks
I do not think that the economy is going into a double dip recession. The government will do everything it can to prevent this from happening. The government will try to offer more jobs and do everything they can do prevent it from happening. The war costs a lot of money but i still do not think we will go into the double dip recession.
ReplyDelete-Katelyn Lubaway
I strongly disagree with a statement in the article that said, "Because the downturn was not caused by high interest rates, lowering them could not lift the economy out of recession." I think that that statement is nothing but conjecture. How could anyone possibly know what would bring us out of a recession. The statement seems to say that the only thing that will bring us out, is the same thing that put us in it. That of course can't be true, and we also don't know exactly what put us into the recession.
ReplyDeleteThat being said, I do not believe the government is doing everything it can to help our economy. And if we continue to spend like the administration has been, I think things could get worse.
-Jake Losen
I agree with most people in that I don't think we are heading into a "double dip recession". Prior to the downfall, the economy was doing very well at unprecedented levels and I think it will take some time for the economy to recover to its previous state. The GDP is increasing, therefore proving we are in recovery. I believe one of the fundamental reasons why we are not seeing a strong enough recovery right now is because of a lack of confidence in the American people to spend and invest in their local economies. It's only when this happens that we will see the economy climb back to where it once was.
ReplyDelete- Andrew Joseph
We just came out of a recession last summer, which means its been about 6 months (or two quarters) since we have been out of recession. It is way too early to even suggest that there is going to be double dip recession (which means a decline in GDP for 6 months or longer). The proper time to evaluate whether or not this is a double dip recession would be to look at the real GDP over the course of 2011.
ReplyDeleteI believe that our economy will not experience a double dip recession. GDP is slowly growing so we need more time to evaulate the situation.
ReplyDelete-Alyssia Jernigan
My opinion I dont think the economy will experience a double dip. I dont think the economy can get any worse. I think that banks should of never gave all those loans to people who cannot afford their homes today. It seems like they were giving loans for homes out to whom ever like candy. The Government should not offer deals like cash for clunkers. If people cant afford there bills maybe they should keep an affordable car and not want another car that needs payments. The government should help out people in general by not having everything so expensive like taxes. I think we will see better in 2011 lets hope.
ReplyDeleteMike Truman
It doesn't have to mean that there is a double dip in the recession upon us. It could just show that Americans are becoming used to a different standard of living or it is taking a very slow pace to return to the economy that we are accustomed to.
ReplyDelete-Donald McDowell
It is going to take more than just a few months, maybe even years for the country to actually feel that the recession is over. With all the difficulties that the country faced, it will take time to fix things. It isn't all up to the government to fix, people have to do their part as well. It doesn't necessarily mean that there is a double dip recession, but rather that we are in a recovery stage.
ReplyDelete-Rita Murillo
During a tough period, economic growth is at its lowest point and increases at a slower rate. When all these elements are activated at the same time, most likely we will see a positive expansion and GDP reaching that point where it was when the economy went into the recession.
ReplyDelete-Simon Foster
What I have concluded from this article is that we won’t face a double dip recession, the recession has ended and we all know it takes at least 6 months to recover. Therefore, I still have hope and I believe that the government is doing their best; nevertheless, we should not jump to conclusion that we won’t face any difficulties and a fast recovery is not expected to be right away.
ReplyDeleteI believe that although we have not returned to the financial state that we were in before the recession we are not entering back into a recession. If the real GDP is rising then no matter what the rate is it is still rising and therefore it is not a recession.
ReplyDelete-Karolina Biernacka
Recessions are a times of economic fall and take time for recovery. In order to recover from a recession resources must be used as efficiently as possible. As long as the GDP is rising the chances of recession are slowly decreasing, however if it is not as fast as it was before it is more likely we fall into another recession.
ReplyDeleteNour Hijazi
After reading the article, I do not believe that we will go into a double dip recession. Although we are not where we should be financially and at a very slow recovery it doesnt say to me that we will go back down. I believe that it is much harder to bring our country to a good level than some Americans will admit. Our president has turned us around enough that we are not in a recovery any longer. We just need to give our economy and the government the time it needs to show a massive improvement.
ReplyDelete- Willie Lyons