By using this site, you agree to our Privacy Policy and our Terms of Use. Close
Bong Lover on 16 December 2011
Edit Thread
lordmandeep said:

True the US is not in a recession but the only reason the US economy looks half decent is because now the Europeans are in a worse spot.

I think we need to adapt to the current situation by rethinking our basic economic understandings.
What we have now is not a recession. Things are not getting worse, but things are not improving much.

The economy is improving, but my good friend the economic decline that occurred (rather harshly to many) has not gone back to per-recession levels and unlike many developed countries, the US population has grown by millions since 2008. That means for most people things are still quite bad and due to weak leadership in Washington and Europe, there is great instability.

So, yes we all know about macroeconomics but do not be so simplistic and think just because we are not in technical recession that things are great and we can go back to massive tax increases like if we are in booming economy.

The US is not in a recession, but I do not see how one can see how tens of millions and perhaps 100's of millions of Americans  feel like if they are in a recession.

Things have improved in the past few months, but we have seen due to great instability that things can easily reverse.

 

Its quite remarkable in Canada people talk about a bad economy but if you drive across the border you see it straight away how things are so much worse in the US.

I never said that the fact that the economy is not in a recession means everything is great, nor that massive tax increases would be possible. (Though I think the US needs to make a choice if they want to continue to be the dominant world power, or continue with extremely low taxes and innefficent use of recources). My point is exactly what you say though, most people still talk about 'The Great Recession' and how everything is getting worse. This is ignoring simple factual information. Again, that something feels like a recession is a meaningless metric. When you base youre actions on how things 'feel' rather than what they are you are acting irrationally. Yet there are countless politicians in the US that base their entire platform on playing into how people feel about things.

But yes, the economy is growing very slowly. Unemployment is being held back by the massive preasurre on public budgets. The last job numbers I saw for example showed modest growth in hiring. Good news that was as unemployment continues to go down, but if you looked at the numbers there were over 100 000 government jobs lost in that month. Regardless of how you feel about government size, those 100 000 jobs would have made a huge difference last month. Basically, with the economy recoverign so slowly it's a bad time to be cutting the number of people in the public sector.

Of course, the US doesn't have much choice right now, public spending must come down to manage the debt problem. So, right now we are paying for the mistakes made 10 years ago or so when everybody thought it was a great idea to cut taxes and underfund the government. Basically congress has painted itself into a corner that is proving very hard to get out of.