There's a lot of debate about whether America is going into a recession, and I think today is a good example of what the economy is going to have to deal with in 2008. Citigroup (one of the largest lenders in America) cut another 4200 jobs and lost a projected 10 billion dollars. The link for the article is at the bottom of the post. What do y'all think? Is America going to be able to avoid a recession or are we already in one? http://news.yahoo.com/s/ap/20080115/ap_on_bi_ge/citigroup
some recessions, like the one we may be heading into, are difficult to avoid if all the right conditions are set for it. Such as gas prices. the price of gas blisters the economy every day and unless prices were to go down, then investor confidence and consumer spending goes down. Damn OPEC for 80-95 dollars a barrel.
something like 70% of economists agree that we are going into a recession, last time i checked. I personally think that we are, the housing crisis has had serious ramifications upon several areas within the economy (extending beyond simply housing related indicators to things like durable goods, employment...etc). My economics class recently went to the UBS headquarters and met with some of their board, and they told us about their incredible losses due to the housing crisis. Most economists think that it will last around 8 months before things start to get better again. Certain places around the country will be far more affected by a recession though. For instance, where I live, we have felt almost no pressure from the housing crisis for some reason. Whereas real estate in some locations has decreased in price by up to 25%, the houses in my area have only dropped by 1-2%
Of course America's heading towards a recession, America has been fueling growth with credit that can't be paid back. The more they cut interest rates, the more people borrow, which only makes the recession even worse the longer you continue. I feel sorry for who ever gets stuck with the mess George Bush left behind. Nine trillion dollar debt and growing? An irresolvable conflict? I wonder how America is even going to have the strength left to tackle energy independence, never mind climate change...
Actually, the price per barrel of oil has remain relatively the same across the world.. The problem here in the US is that our dollar has been weakening against the rest of the world. So, when once you could get two dollars from country X for one US dollar, you can now get 2 US dollars for one dollar from country X. (It generally is not *this* bad, but, it's an example.) This generally happens when you borrow a ton of money from someone and then they start to loose trust in you.. If the lenders (mostly China in our case) do not believe we can start to pay back what we borrowed, that's a problem because they will not lend us more or at the same rate they were. Which in turn causes problems when we (the US) do not stop printing more US dollars. Yay! I like printing money from thin air too... Sadly, I get arrested for such things while the government does not. :dry:
Personally i think that we are already in one. If someone would just stand up to the :***: oil companies then none of this would happen. While Exxon and Mobil are reporting profits as large as 3 billion per quarter our economy spirals down further and further. If someone would do something about this and were to find some way to get gas prices back down to a very reasonable amount then Americans would have more money thus making it easier to pay off all debts while still covering their cost of living.
I'm relatively sure that they will not counter a recession by simply printing more money, that would only increase inflation and further lessen our individual purchasing powers. The govnernment may choose to puruse expansionary fiscal policy, and we have already seen that the Federal Reserve is doing what it can in the way of monetary policy by repeatedly lowering the fed funds rates and the discount rate. (it looks as though they will do so again in at the next FOMC meeting in a few weeks)
Not to stick up for the oil companies, but their profits as a percentage of their operating costs are actually pretty much right in line. Billions of dollars in war profiteering for our "elected" leaders are killing our economy. And yes, the U.S. is finally heading into recession. For seven years, the bulk of the U.S. has sat around thinking everything was peachy-keen while Michigan suffered a "one-state recession." Well, you can't have a one-state recession in Michigan and expect it to stay contained. In 1997/8 when General Motors was shut down by a strike at a part-supplying plant, the gross domestic product of the United States was impacted by an entire percentage point. Figure that all of the U.S. automakers (all based in Michigan) are losing money, and it's no surprise that the nation is finally going into recession.
I believe that the problem with the economy is the fact that the Republicans left it basically unregulated for the better part of seven years. They didn't try to regulate the mortgage companies when they were making those terrible subprime mortgages, they didn't do anything to keep companies from exporting jobs overseas (or do anything to help the industries that are still here), and they didn't cut spending like they claim they do. I am generally for a free market, but issues like those need to be addressed, and the Republicans refused to do anything because of the special interest involved. So now we're stuck, and the Democrats (hopefully) are going to have to try to get us out of it all.
Indeed, I completely agree. What I said in my previous post is that we are facing those problems (inflation, etc) because we have kept printing money and do not have anything of value to back it. This is why oil (and eggs and milk and computers and ...) are getting more expensive in the US, but not in the rest of the world as a whole. I was responding to the previous poster who blamed all the problems on oil cartels. It is not their fault we have driven our economy into the ground. It is also not their fault that they control a limited supply while our demand increases more everyday. Simple economics... They deserve their enormous profits because they invested well in the past and now they are raking in the cash.
the economy goes through waves of recessions and expansions. when Bill Clinton was president we were in an expansion; the national debt was super low and things were economically pretty good (in fact a lot of things were good, politically and governmentally). so, it makes sense that we would be in for a recession. can't remember what the spacing is statistically for the times between expansion and recession, but i'm sure it wouldn't be hard to find.
