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Is the US and the World now in a Global Economic DEPRESSION?

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Shifting gears to a much serious topic. With the stock market yesterday(2/23/09) on the dow sinking to the lowest levels since 1998. We all what happened late last year with several banks and insurance companies including global giant AIG going down the tubes.

People losing their jobs left and right to the highest unemployment in America since the mid 1970's the last major deep recession.

Our daily lives already affected and about to screw us even more as the governemnet in both Albany and Washington trying to adjust. About to occur is cuts in everything in school funding to our beloved NYC area mass transit on verge of sevre service cuts and major fare hike.:mad:

 

Plus despite good polling numbers for our President Obama, the honeymoon of a new Commander in Chief is over. Plus questions whether our government should have bailed out the mismangaged banks. Also the Detroit Auto Makers too.

 

 

With a plate load of questions, what i am asking is this important question? Is America and most of the world now in a "Depression?" People especially gvernment officals and on Wall St think it's a dirty word. Feel free to reply and if you any of you or members of your family has been affected by this ecomonic disater? Thanks in Advance.

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Its difficult to determine with any validity whether or not we are in an actual depression. That won't be determined until much further down the road (looking back on the situation)

 

We are certainly in a recession though. The mortgage crisis in this country laid the groundwork for what is going on now... and while I am a proud Obama supporter, I don't feel as if this "economic stimulus" is going to do any good... I certainly hope I'm wrong, but superfluously injecting money into a poisoned economy won't do any good in the long run in my opinion. And then we're out another $800 billion.

 

I'm no economist, that's just my two pennies.

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The current crap storm we're in has nothing to do with the current administration. It all started with greenspan and bush and 8 years of mismanagement. It will take time to reverse this trend the republicans seemed to want so bad in 2004/00 so far as to rig the elections. Now they refuse to cooperate to fix they mess THEY got us into. Spending bill. So, how do you save an entire global economy without spending money? Ugh. The whole thing stinks like last month's trash. If we are to ever get things back to some semblance of normal, we need the pinheads in washington on the (R) side of the aisle to snap out of it. How about a PAY CUT for congress? :mad:

 

- A

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The current crap storm we're in has nothing to do with the current administration. It all started with greenspan and bush and 8 years of mismanagement. It will take time to reverse this trend the republicans seemed to want so bad in 2004/00 so far as to rig the elections. Now they refuse to cooperate to fix they mess THEY got us into. Spending bill. So, how do you save an entire global economy without spending money? Ugh. The whole thing stinks like last month's trash. If we are to ever get things back to some semblance of normal, we need the pinheads in washington on the (R) side of the aisle to snap out of it. How about a PAY CUT for congress? :mad:

 

- A

 

Now trying to play devil's advocate with Metsfan what about those who also lay blame at President Clinton in which he allowed congress to pass laws that basically made home/car loans easily available to basically anyone who worked even if they were a credit risk? The Clinton Adminstartion argued for making the banks allow for easier loans is they were trying to get more home ownership among the working poor particuarly minorities.

 

Some of those people spend those loans to buy homes way out of their price range costing the banking industry Billions. This is a fact.

Not to mention the trillions Insurance companies like AIG lost covering disaters like Hurricane Katrina.

 

 

Politically I am an Indepedent. Yes Bush, Jr. deserve manjority of the blame. However just like 9/11 IMO Bill Clinton deserve some blame too. Stating facts. Any replies.

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I know the markets are not doing their best, but look, this is not the only major recession America/world has witnessed. If the governments do the right thing and lessen the fear that the public is now having about the economy, perhaps the people will continue to buy and keep the economy moving.

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This Recession or w/e you want to call it will take at least 3-4 years before thing ecomically gets back to normal. If Obama does a bad job we are in a "depression' for sure.

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Here an intresting article in this morning NY Daily news on what to call this ecomonic crisis.

 

Can we call it a Depression yet?

 

BY Catey Hill

DAILY NEWS STAFF WRITER

 

Tuesday, March 3rd 2009

 

Depression. It conjures up images of food lines snaking around street corners, of unfettered unemployment, of despair over the stock market.

 

 

Employers slashed 598,000 jobs in January, the most since 1974

Bernanke: Economy in 'severe contraction' - but stocks rally

Bad to worse: Economy shrank faster than expected to end '08

GDP falls 3.8%, as U.S. economy suffers its biggest slowdown in 26 years.

 

But things don't have to be that bad to still be considered a depression. So, are we in one now?

 

ABC News reports that we just might be:

 

The trouble with firmly determining whether we are in a depression or not is that the word 'depression' is hard to define. A recession, on the other hand, is more easily defined. It's generally a reduction in a country's gross domestic product (GDP) for at least two quarters.

 

A depression has several definitions including: "a downturn of three years or more with a 10 percent drop in economic output and unemployment above 10 percent," or a prolonged recession in which people have to sell their assets to pay for living. By the former definition, we are not in a depression, but by the latter, we just might be. After all, this has been a prolonged recession and people are selling their assets.

 

Some members of corporate America, including Tony James, president of private equity firm Blackstone, have called in a depression. Business professors have said the same thing.

 

"We're probably in a depression now. But it's not going to be acknowledged until years go by. Because you have to see it behind you," Peter Morici, a business professor at the University of Maryland, told ABC News.

 

If we use the Great Depression as the marker of what a depression looks like, we're not there yet. To almost every major political leader from Washington from the White House on down, it's still a dirty word. Most Consertatvives barely mention we are in a recession, now.

 

Unemployment in the Great Depression reached 25 percent or more and the economy shrank 27 percent from 1929 to 1933. Our current unemployment is a little more than 7 percent, and the economy shrank 6.2 percent in the fourth quarter of 2008. Granted the fourth quarter of 2008 is a much shorter period of time than the four year economic shrinkage above, so we will have to see how much more (or not) the economy shrinks.

 

While we're watched as the stock market tanked, with Monday being the first time since 1997 that the Dow fell below 7,000, the Dow Jones would have to fall about 5,000 more points to get to where it bottomed out during the Great Depression.

 

But is the Great Depression the correct marker for the current depression? Are we in or are we soon headed for a depression? Here are some of the indicators:

 

The bad news: Consumer confidence and unemployment have plummeted, with most signs pointing to continued job losses and more economic shrinkage. Also Car Sales and other high priced products globally are at all times lows in modern era of sales keeping since end of World War 2.

 

The good news: We have safeguards in place that were not there during the 1930s such as deposit and unemployment insurance. And the government is pumping trillions of dollars into the troubled economy to try to get it humming again.

 

c)2009 NY Daily News, Inc.

 

Any reactions?

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No, I don't think it's a depression yet - you need 6 months of decline in total output, income, employment, and trade for it to be considered a recession; a depression is a severe and prolonged recession.

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No, I don't think it's a depression yet - you need 6 months of decline in total output, income, employment, and trade for it to be considered a recession; a depression is a severe and prolonged recession.

 

 

Well one person who refuses to take the blame is former VP Cheney. He gave his first interview yesterday since leaving office.

 

 

Back to the poltical aspects of this crisis. Former VP Dick Cheney in his first major intervew since ending his term & leaving the post in January said alot and blamed the Democratics for the economic meltdown. Here story.

 

Ex-V.P. Dick Cheney: Don't blame Bush administration for economic mess; Obama making U.S. less safe

BY Michael Mcauliff

DAILY NEWS WASHINGTON BUREAU

Sunday, March 15th 2009

 

Former U.S. Vice President Dick Cheney spoke on CNN Sunday in 1st Interview since leaving office.

 

 

WASHINGTON - Former Vice President Dick Cheney says don't blame George Bush for leaving President Barack Obama with an economic catastrophe.

 

It was everyone else, and the Democrats, who brought on disaster, said Cheney, who was arguably the most influential VP's and advisers over his eight years in US History. Cheney lead the country from "9/11', the "war in Iraq, the aftermath of Hurricane Katrina, and the start of the Ecomonic Crisis.

 

"There's no question that what the economic circumstances that President Obama inherited are difficult ones," Cheney said on CNN's Host John King on the show "State of the Union" this morning. "I don't think you can blame the Bush administration for the creation of those circumstances."

 

Instead, Cheney suggested the current problems stem for the worsening world economy and "Liberal' Democratics obstruction of Bush's attempts at reforming the government-backed mortgage giants, Fannie Mae and Freddie.

 

"This isn't something that happened just in the Bush administration or just in the United States," Cheney said. "We are in the midst of a worldwide economic period of considerable difficulty here.

 

"It's important to understand that. It doesn't do just to go back and say, well, 'George Bush was president and that is why everything is screwed up,' because that is simply not true," Cheney said.

 

He insisted that his White House wanted to act on the mortgage front in the U.S at least a year before the Global meltdown started in September 2008.

 

"We had, in fact, tried to deal with the Fannie Mae and Freddie Mac problem some years before with major reforms and were blocked by Democrats on the Hill, Rep. Barney Frank and Sen. Chris Dodd," Cheney said.

 

"The Democrats absolutely opposed any effort to reform those two institutions, and I think the collapse of those two institutions, as much as anything, contributed to the financial difficulties we've been living with since," he added.

 

But he also suggested there's not much point playing the blame game now that he is out of office.

 

"I think the notion that you can just sort of throw it off on the prior administration, that's interesting rhetoric but I don't think anybody really cares a lot about that," Cheney said.

 

Many analysts point to all the bad loans that Fannie and Freddie backed as the start of the collapse. But many also blame Republicans in Congress for relaxing regulations that allowed most of the financial world to jump into the mortgage market.

 

Cheney stated his continued belief in little or no government regulations in the stock markets and put much of the blame on the crisis on 'crooked CEO's and investors.'

 

Dodd and Frank could not immediately be reached to respond.

 

c)2009 NY Daily News, Inc.

 

 

 

any reactions?

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