I feel our economy has been going down the shitter for a while now. I will even be fair and say that it might not be entirely the Democrats fault, but I don't think their policies are helping us get to a better spot. The whole Covid pandemic/endemic disruption to our normal lives had a lot to do with it. If we are going to accept this, then we can also say it is not Trump's fault, the decisions he made, such as giving out free money in the beginning and midst of it made sense at the time, honestly, most people were scared for their lives, initially. The media deserves more than their share of the blame here, I think in their best intentions to keep us informed, they went out of their way to paint a picture of doom and gloom if it helped their cause or that things weren't nearly as bad as they were, at the time. But here we are, halfway thru 2022 and the freaking virus was named Covid-19, for the year it started in, so it has now been almost 4 years of dealing with it. We need to just accept it like the flu and move on with our normal lives. Everyone has to get back to work as they were pre-pandemic.
All these shortages in everything it seems is either a manipulation by the government or if it is true, it must be because not enough people have come back to work. Where did they go, surely Thanos did not snap his fingers and half of society disappeared?
But the question is not what got us here, but what does it mean, to be in a recession? The Google definition is a significant decline in economic activity that lasts for several months or even years (someone then defined that more narrowly as a decline for at least two quarters). This means that there has been a decline in productivity, sales, manufacturing and other things that keep money flowing. Recessions are a normal part of the cycle of the business cycle, probably the reason we constantly see new car models and new clothes styles introduced to the public, to keep us wanting the latest and greatest, thus, to keep the money moving and reducing the chances of falling into a stagnant sales situation.
The negative consequence of a recession is that there are increased job cuts, which lead to higher unemployment, which then leads to increases in home foreclosures, which leads to more negative results. This can turn into a negative spiral as more people fall into foreclosure, banks get desperate and then they may raise interest rates, making homes even more unaffordable, which all leads to more unemployment and then even more people losing their jobs, and on and on.
All this can lead to a depression and depressions are much worse than recessions because they can last for years. The great depression in 1929 lasted for years and we did not fully recover until the end of WW2. During the great depression, unemployment rose to 25%. We had not seen numbers that bad until the housing market crash in 2007, which resulted in an unemployment number around 10%. Currently, we are hovering around 14%, which seems odd with so many businesses posting "Help Wanted" signs, which again makes me ask where are the people who are supposed to be working right now? Maybe everyone has become a TikTok superstar.
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