Are we headed toward a depression?

[Queen Mum Inks.LWC]

It's not a pretty question, but I think it has to be asked at this point.

[CARLHAYDEN]

It's not a pretty question, but I think it has to be asked at this point.

A depression, probably not. 

A lengthy and painful recession, probably.

A hyperactive presidency next year is likely to make the situation worse.

Lets hope that Congress can restrain the next president.

[Ban my account ffs!]

I think the key to helping this country will not be to react and try to fix the country and take it out of recession... sure... stop some of hte bleeding...

But the main priority should be enacting policy that prevents this from happening next time.  We need effective regulation of banks that prevents them from taking these bad risks that will hurt the economy without choking investment.  It's a fine line, and with the ginormous ink splotcher the government likes to draw those lines with... we'll see how well we can pull through this.

But I think this recession is already in the bag.  We need to stop the bleeding, cut our losses, and promote investment while stopping people from falling through the cracks.  Then we can say "well, we won't let this happen next time" because there WILL be a next time.

[CARLHAYDEN]

While some regulation is necessary, it seems to me that the decline in competition, often fostered by regulators is a bigger problem.

What we need is more vigorous enforcement of existing anti-trust laws, rather than having regulators waiving such laws

[NDN]

Lets hope that Congress can restrain the next president.

We're all dead then.

[Storebought]

Unfortunately, no.

So you believe in the principle of 'rule or ruin'?

[© tweed]

depressions don't exist

[Queen Mum Inks.LWC]

I say no, by the way.

[Robespierre's Jaw]

No, but rather a serious recession.

[Lunar]

For the sake of simplicity, I would say yes.  If one wishes to argue it, then whatevsky, I'll accept "serious recession" just as well.

I really have to figure out what to do with myself now.  I either have to get a job lined up consulting or go to professional school, I can't enter the job market in a year without making 10% less for the rest of my life. 

[Kaine for Senate '18]

No, but we're headed towards one bitch of a recession.

[A18]

These threads are testing my sanity.

The term "depression" has no formal economic definition. And to the extent that it has a colloquial one, "serious recession" would surely be it.

[War on Want]

No but a pretty terrible recession. Things should just gradually spiral downward from here for a while.

[King]

We are heading toward one, but I doubt we will make it to our destination.

[CARLHAYDEN]

Here's a couple of snippets of news in response to the rejection of the extortion, er, bailout:

NEW YORK (AP) -- Oil prices tumbled more than $10 a barrel Monday, dropping back below $100 as a U.S. financial bailout failed to win legislative approval

Times Online--The euro also fell heavily against the dollar

[MODU]

At the moment, I would have to say no.  We have yet to have a quarter of negative GDP, so no recession (which would have to happen before a depression), and we are currently having increased exports due to the cost of our products being more affordable by the outside world, even though the value of our dollar is rising.  It is hard to say what the current 3 weeks will do to those figures, but I have to say no, we are not currently heading towards a depression.

[Filuwaúrdjan]

Unfortunately, no.

So you believe in the principle of 'rule or ruin'?

Haha, sure.

No, I believe in allowing the economy to naturally run its course.  We're about due for a recession, but considering the past actions of the government, we need a good depression to fully sort things out.  Horrible, I know, but more than necessary for the greater good of our nation's future.

Easy for you to say, rich boy.

[Storebought]

Unfortunately, no.

So you believe in the principle of 'rule or ruin'?

Haha, sure.

No, I believe in allowing the economy to naturally run its course.  We're about due for a recession, but considering the past actions of the government, we need a good depression to fully sort things out.  Horrible, I know, but more than necessary for the greater good of our nation's future.

Immiseration of the public for the sake of an economic theory doesn't strike me as either wise or moral.

[TomC]

There's that knee-jerk demonization of laissez faire as indifference.  The natural instinct is to fix, fix, fix.  All this fixing makes things worse for the American people.  With my theory they go through a rough couple months and have to dip into their savings a little.  Under the current policy of the federal government, we protect people from pot holes and direct them over a cliff.  My theories protect people, not give them a false sense of security like the bailout does and all interventionist policies do.

http://articles.moneycentral.msn.com/Investing/Extra/USSavingsRateFallsToZero.aspx

"Americans have stopped saving for a rainy day.

Instead, they are living paycheck to paycheck, depending on credit cards to get them through emergencies, and hoping that the rising value of their homes will give them a retirement nest egg.

This personal economic chasm is showing up in the national savings rate, which has been declining for years. Tuesday, the Commerce Department reported that the personal savings rate fell to zero in June, the lowest since a one-month buying binge in the aftermath of the 9/11 attacks. The United States is on track to record a savings rate for the year below 1%, which would be the lowest since the depths of the Great Depression, when the rate turned negative."

"A recent Consumer Federation survey found the lack of savings was especially troublesome to women. More than 70% said they worried about their finances in the last year, and two-thirds said that unexpected expenses -- things like the furnace breaking or the car needing to be fixed -- were the cause of that worry.

That's because they had little or no money set aside. More than 40% of all women had less than $500 in the bank. For those 25 to 34 years old, the percentage without a rainy day fund jumped to 55%."

[opebo]

Fezzy, you have no idea whatsoever about how 'the economy' works.   But then again there is no reason for you to.

Anyway what is wrong with the State 'fixing' (changing) what it has made?  You need to abandon the silly idea that the economy exists independently of the State. 

[TomC]

There's that knee-jerk demonization of laissez faire as indifference.  The natural instinct is to fix, fix, fix.  All this fixing makes things worse for the American people.  With my theory they go through a rough couple months and have to dip into their savings a little.  Under the current policy of the federal government, we protect people from pot holes and direct them over a cliff.  My theories protect people, not give them a false sense of security like the bailout does and all interventionist policies do.

http://articles.moneycentral.msn.com/Investing/Extra/USSavingsRateFallsToZero.aspx

"Americans have stopped saving for a rainy day.

And why is that?  Because they have been taught not to save.  They have been told to spend, spend, spend as much and as fast as possible, much like our federal government.

For some, yes. For some, they can barely pay for rent, food, utilities, and childcare. In fact many can't without some sort of credit. They put diapers and the kid's medicine on a credit card (poor health insurance, if any). They need a car that works, and it probably needs gas. They need clothes. There's nothing left over to save. If the overall savings rate is below 1%, that means many are at negative savings.

Don't assume all people even have the luxury of "spend, spend, spend." Far from it. I have to agree with Opebo on this- you are being naive.

[Storebought]

My comment had nothing to do with a critique of laissez-faire economics. Far from it.

You're arguments about the people having to endure 'a rough couple of months' ... for the sake of the greater good ... in the long term ... has been used by practically every Socialist in the 20th century. Hugo Chavez is making that argument in Venezuela as I'm typing this. I'd be damned if I see an economic rightist legitimize that specious type of argument here.

I will agree that legislative "fixing" is a deep problem (I thought Sarbanes-Oxley put an end to all of this /sarcasm). But it requires a special type of obstinance not to recognize that something within our capitalist economy is not working, and that the failure of private business to recitfy it will only mean that, eventually, the people will vote themselves an alternative that neither of us would like.

[opebo]

And why is that?  Because they have been taught not to save.  They have been told to spend, spend, spend as much and as fast as possible, just like their federal government.

In fact what is needed is more spending, not more saving, Fezzy.  It is absurd to expect working people to 'save' in any significant way as they are paid a subistence by the current system.  In order to allow them to consume more or save, they need to have their wages boosted by government actions (unionization, high minimum wages, government subsidies, unemployment/welfare benefits, free health care, etc.).

[opebo]

The average person in poverty today lives a lifestyle comparable to that of the average family in the 1970s. 

What absolute nonsense.

[Storebought]

And why is that?  Because they have been taught not to save.  They have been told to spend, spend, spend as much and as fast as possible, just like their federal government.

In fact what is needed is more spending, not more saving, Fezzy.  It is absurd to expect working people to 'save' in any significant way as they are paid a subistence by the current system.  In order to allow them to consume more or save, they need to have their wages boosted by government actions (unionization, high minimum wages, government subsidies, unemployment/welfare benefits, free health care, etc.).

Or just have the managers of private business increase wages. No need for government prescription at all.