Brent & I have been discussing the economic situation and have wondered what the difference between a recession and a depression. What do we do when we want more information??? we google it! The best definition Brent found that I really liked is "a recession is when your neighbor looses his job, a depression is when you loose your job".
A recession or depression is declared by an obscure committee under the US government department of economics that has a really long unhelpful name. They consider many factors and basically it is based on negative growth of the economy. This committee has not declared we are in a recession. There are many economists that are jumping the gun.
The great depression of the 1930's had a negative growth of 33% and lasted 4 years. Since then we have had several recessions and they have lasted between 12 and 18 months and the worst % of negative growth was 4.9. We are no where near that right now. A depression is a prolonged recession. Our economy is slowing but not negative yet so to me it feels like many people reporting the news are over reacting and causing lots of worry when it is not needed. I feel less worried, but then Brent still has his job!
I thought this interesting and hope you do too.
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2 comments:
I must admit to some confusion also. I love that definition, that's my idea of an explaintion. I admit as soon as I saw we were even having problems I stopped watching the news. Anything really big happens and everyone around me talks about it, nothing like the people filter...
jen
Interesting. Very interesting. I think one thing Ryan and I have noticed lately is there are many things that Loud voiced people declare, causing worry, but in fact, there is no problem. Take for instance, global warming. Some say there is global warming, and everyone has snatched on that thought and worried, and yet, other scientists and wotnot say we are in a global cooling period.
Thanks for the information.
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