Is This Recession Going to Become a Depression?

QM · 10-29-2011, 07:14 PM

My friend and I were chatting this evening about the recession becoming a depression. I don't know much about "how recessions start", "why/how this recession started in the first place" (my friend told me it was the States fault), or "when it is going to become a depression". This topic started when my friend told me that a huge car plant closed down nearby and lots of people are without jobs...and most of the employees only have a highschool diploma.

I read online a couple years ago that a depression takes approx. 4 years after a recession starts. I don't know how true that is, but if it is I think a true depression could start at the end of 2012.

What exactly happens in a depression? I only know a bit from what I heard from my grandparents...and I don't remember much other than it was scary for a lot of people. I don't think either of my grandparents starved or anything, but I think it was scary in general.

Also...What needs to happen for this recession to leave us? If we're all holding onto our pocketbooks, how is this recession going to go away?

I'm only asking these questions so I can learn more. I find google has TMI and I get lost in all the wording and statistics.

**Nishu** · 10-29-2011, 07:30 PM

I don't think there's an official definition of an economic depression, but I've always understood it to be a term that you toss around after a recession reaches a certain length. "Depression" seems to be a term you use after the fact. I think that history will remember this time period as a depression.

Fwiw, I've been reading a lot of good news lately about the economy. US manufacturing is fashionable again. October has been the best month for the stock market since 1987. The EU seems to have come to an agreement over the debt crisis in Greece, which will put a lot of job-creating minds at ease.

I'm hopeful that things are looking up.

QM · 10-29-2011, 07:36 PM

Originally Posted by Nishu

I'm hopeful that things are looking up.

So am I. I just want this recession/depression (whatever it is) to go away so people can get their jobs back.

QM · 10-29-2011, 07:52 PM

Thought I'd share...

**frugalwarrior2** · 10-29-2011, 08:15 PM

Gerald Celente utube

**HappyMama** · 10-29-2011, 08:18 PM

Originally Posted by frugalwarrior2

Gerald Celente utube

+1 He has been right so far.....

**Frugal_Scott** · 11-01-2011, 04:06 PM

I think for the millions who are suffering, whether it's a depression or a recession doesn't matter a whole lot.

The real question is, what can we as individuals do to help each other, and to keep ourselves and our families together?

This website helps a lot, I think. Seems like a small thing, but it's amazing how many people (especially under 30, I think) have no sense of personal finance.

**Greebo** · 11-01-2011, 04:29 PM

Strictly speaking, we aren't in a recession anymore.

And we haven't been since 2009 - since GDP has been rising. Slowly.

What we're really in is more of a stagnation.

**HappyMama** · 11-01-2011, 04:37 PM

Technically speaking but numbers wise this is interesting:

Figures from the Census Bureau’s Current Population Survey, compiled by Sentier Research, show that the ‘recovery’ has actually been harder on most Americans than the recession from which they’ve allegedly been recovering.

In early 2000, Americans’ median annual household income was $55,836, in real (inflation-adjusted, June 2011) dollars. By the start of the recession (in December 2007), Americans’ real incomes had fallen 0.9 percent, to $55,309—a decline of $527. During the recession (which ended in June 2009), their incomes fell an additional 3.2 percent, to $53,518—a decline of another $1,791. During the first two years of the “recovery” (from June 2009 to June 2011), they fell an additional 6.7 percent, to $49,909—a decline of another $3,609.

A chart from the Sentier report shows the median household expressed as index, starting at 100 in January of 2000. As you can see by following the red line the decline has been more precipitous January of 2009. Fun fact: During Recovery Summer, the household income index stayed level (at just under 92), then plunged about two tenths of a point right after.

**Nishu** · 11-01-2011, 04:49 PM

There isn't a universal definition of recession, either. GDP is only one of the economic indicators used to determine whether we are in a recession.

Are we in a recession? | Marketplace From American Public Media

To use the definition of a drop in GDP as the sole determining factor is not really accurate.

QM · 11-01-2011, 05:00 PM

So we'll never know when/if a 'depression' starts...Will we?

**HappyMama** · 11-01-2011, 05:30 PM

http://www.zerohedge.com/sites/defau...amps%20Aug.png

Click on the link the chart is amazing

The number of Americans receiving food stamps reached a record 45.8 million in August, the government said.

The figure was 1.1 percent higher than the previous month and 8.1 percent more than a year earlier, the U.S. Department of Agriculture said today in a report on its website. Assistance rolls are increasing as joblessness remains at 9.1 percent of the workforce.

Texas had the most food-stamp recipients in August, at 4.12 million, followed by California with 3.82 million, according to the USDA. Spending was a record $6.13 billion.

The number of Americans receiving food stamps under the Supplemental Nutrition Assistance Program has set records every month but one since December 2008.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth in Chicago a

**KeithBC** · 11-01-2011, 08:56 PM

Because people are so scared of a depression, the unofficial definition of a depression is "just a bit more serious than whatever we have now." In other words, you aren't going to hear anyone in authority call it a depression, no matter how bad it gets, until it gets into the history books long after it's over.

I don't want to alarm people unnecessarily, but, realistically, we should get used to it.

Wealth is produced by the consumption of natural resources. We cannot continue to increase our consumption of natural resources forever, therefore economic growth cannot continue forever. Stability is when growth alternates with shrinkage more or less equally and all resources consumed are renewable. We haven't tried it yet.

**frugal is fun** · 11-02-2011, 10:35 AM

Originally Posted by KeithBC

I don't want to alarm people unnecessarily, but, realistically, we should get used to it.

I feel the same way with this one. I have been blessed with a good, secure job and even with a steady income, I feel that I'm struggling more now than I have in the past.

**greekislandgirl** · 11-02-2011, 10:44 AM

I know this is probably a really simplistic definition, but when I was in high school US history, the teacher said a depression is when 25% or more of the workforce is unemployed. That number has been reached already in several European countries and in many regions in more countries. So I guess in some places it is already a depression if you use that criterion.

Personally I feel that it is a depression where I live because they are saying it will be 10-15 years before things get better and my entire generation will live in poverty and there is no hope for us really (I'm 30). However, I also live at the epicenter of financial disaster.