You say Recession I say Depression,
Let's call the whole thing off.
In light of the economic situation we find ourselves in today, it seems to me that there is a very real possibility that we could find ourselves in another economic depression. So I thought it would be interesting to research two questions on this subject. First what are the differences between a recession and a depression, and secondly what were the extenuating circumstances that led to the Great Depression.
In regard to the first question what constitutes a depression; former President Ronald Reagan in a speech in 1980 gave a simple political definition, “A recession is when your neighbor loses his job. A depression is when you lose yours.” This is a very simple definition, but it probably feels true on the personal level. The most prevalent definition of a recession today is; a recession is when the GDP (gross domestic product) declines less than 10 percent for two, consecutive quarters. A depression on the other hand is classified as a decline of the GDP by more than 10 percent. By this measurement we have not seen and economic depression since 1937 when the GDP fell 18.7%. Although these definitions don't really give a total picture of what leads to a depression, they do give an indication as to where we're heading.
Much of the economy and outlook in the 1920's were positive. Things seem to be on a never ending road to continued prosperity. Watch the video depression vs. housing that I have posted on this page and you will see the positive statements made by leaders of that time, right up to, and even after the crash in 1929. The similarities between what was being said then and what's being said now are both comical and a little disconcerting.
In my research I found one of the suspected culprits for the severity of the depression was a lack of confidence and a fear of the future by people like us (consumers). I don't want to be a fear monger and I hope for the best like anyone else, but I think its also important not to make believe that this economy is not going to leave scares on our society. We have been foolish in the way we handle money, and it has caught up with us. What steps we take to fix the problem will determine were we end up.
Depression or Recession?
That’s a least partly up to us.
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I can relate to this, "President Ronald Reagan in a speech in 1980 gave a simple political definition, “A recession is when your neighbor loses his job. A depression is when you lose yours.”
ReplyDeleteMy acquaintance is in a recession. She always thinks "it" can't be done, her attitude has followed her for several years since she's lived here. She (and spouse)sinks deeper and deeper into the same hole she started out with, many moons ago. My attitudeis "I think it can be done," that attitude has served me well.
I look at life like dodging rocks. Whatever place I'm in at the time I dodge a rock with a new tactic.
If I were on the streets I'd take up hand sewing to keep my sleeping bag in good shape. I'd have time to smell the roses and not worry about bills, weeding the yard, and keeping up with the Jones'.
There are things we can change and things we can't. I have learned to be content with whatever the day brings and learn to cope if it's a tough day.
I agree that we must try and keep a positive attitude. We need to do what we can to improve the situation even if it's only on a personal level.
ReplyDeleteI also agree that we need to be content, but we also need to be careful that we're not like the frog in the pot of water. Has the heats raised he's so content he doesn't notice that it's getting dangerously hot, and stays there until he's boiled to death.
I meet people all the time who tell me I should be making more money for the amount of work I do. Well, I suppose that might be true, but the funny thing is, I'm pretty darn happy doing what I do. Maybe that's why English teachers don't make much money: there's less of a demand for good teachers because good teachers love what they do. Also, it keeps greedy bastards from becoming teachers.
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