RSS
Home
Recession versus Depression
Print
Email
RSS
Subscribe
The difference between a recession and a depression has been described as, "A recession is when your neighbor loses his job. A depression is when you lose yours." For Americans, answering the question about the difference between the two is not that simple. Recessions can become depressions when a government makes wrong decisions as to how to deal with it. Unfortunately until data about such things as job loses and other factors hit bottom, no one seems to know when a recession becomes a depression.
According to James Pethokouski, "4 Ways to Turn a Recession into A Depression" (U.S. News, 11/04/2008) there are ways that good and bad policy can effect an economic downturn. He included raising taxes, raising uncertainties in the business community and starting a trade war as bad policy. To improve the economy, Pethokouski suggested cutting taxes, avoiding hastily prepared new regulations, and reforming the entitlement system so that international investors's faith would be restored in the United State financial system
There is hope among Democratic politicians in Congress that the stimulus programs created by themselves and President Obama will have some effect in bolstering the economy. Meanwhile, unemployment figures continue to rise throughout most of the U.S. There are estimates that it could take anywhere from six month to three years for positive results to be seen. If the stimulus package does not begin to create jobs and there are signs that a recession has turned into a depression by the time of the 2010 elections, it could change the political makeup of the House and Senate.
Related Articles:
Add a Comment
