2T economic contraction over 24 months, ok lets translate

[nadinbrzezinski]

that is about a six to eight percent GNP contraction over the course of each year... (I am thinking it might be higher than 1T per year, why the extra 2%)

This is NOT quite a depression level contraction... that be 10% GNP contraction or above... but it is too close for guv'ment work

By the way... we are in some ways seeing FDR II... and the same fights that FDR had to fight in 1933 are being refought...

And yes, there are some extreme right republicans that are, as I type, trying to rewrite history

Will be a hell of a ride....

Damn this is not fun....

And some of us called this over two years ago

[Zynx]

1. Actually, 1930 and 1931 were only in the -6-8% range. 1932 was -13%.

[nadinbrzezinski]

3. Why 1932 was a depression level economy

while 30 and 31 were a recession economy

Now imagine if Hoover had to be done (aka spending)... we might have avoided the Great Depression

And he'd be a hero

Now looking for the actual Econ definition


http://economics.about.com/cs/businesscycles/a/depressions.htm

A good rule of thumb for determining the difference between a recession and a depression is to look at the changes in GNP. A depression is any economic downturn where real GDP declines by more than 10 percent. A recession is an economic downturn that is less severe.

That said, if you are unemployed, or a highly depressed area (like where he spoke this morning in Indiana), that is a personal depression

:-)

[Zynx]

5. Ahhh....Okay. Well, the cummulative decline was over 10%. You don't have to be declining at a 10%

rate at all times. If we declined 2% a year for five straight years, I would call that a depression.

[nadinbrzezinski]

8. Word Bank says per anum

that said, Word Bank is trying to determine what that "magic number" is for the world economy, and last I heard it is lower than any national economy

The world economy will be considered to be in depression with a yearly contraction of 7%... that is the world economy

Last I heard they were still hashing it since they are trying to balance or average out national economies

In reality this is just an academic definition, and if you have no job, or fear loosing yours, academics, shmacademics, really don't matter

After all until 1929 we called depressions panics, we changed the term to depression, and the term recession came into use after WW II, with the contraction of '45-8 which was bad, but nothing like the great depression

By the way, using this academic definition, FDR had to deal with technically TWO depressions, 1933, and 1937

[Zynx]

10. These mathematical definitions have always kind of struck me as nonsense.

I am an economics major, although I am currently actually going into public finance, and I have never subscribed to these tight definitions. I think a great deal is overlooked by them.

As for their cutoff, looking at the GDP data I downloaded a few weeks ago, 1933 was only a -1.3% contraction and 1938 was a -3.4% contraction.

Just for some comparison, 1982 was -1.9% and that is the worst we have had until the present since the WWII demobilization. If we do -4% or -5% this year, that will be catastrophic.

[nadinbrzezinski]

11. That is also a school of thought

to me they are only useful as a place to use certain terms.

And they do miss a lot

Also the way we measure employment and GDP today is very different than we did in 1980

So they have lost a lot of their meaning... and in order for them to work again (the way they were intended) we need to return to the way we used to do this, including reporting on the M3

So for the moment, I take them, all numbers, with a huge grain of salt

To me the real unemployment, for example, is already in the double digits nation wide

[Zynx]

14. Speaking of unemployment, I think U6 is useful, but I don't personally use it for

historical comparison. I do like to include the discouraged worker number at all times because I really don't see how you can avoid it. The reason I don't like using U6 for historic comparisons is that it wasn't what was used back in the 1930s. If we used that definition, unemployment was about 40% in the 1930s. We were counting people who were working a few hours a month back then as well. U6 is a very useful for measuring how successful a recovery. For example, if the present measure of unemployment gets up to 10% and U6 gets up to 16% then a recovery starts and the headline number gets down to 8% while U6 stays at 15-16% there would be something very wrong in how the recovery was occurring.

[nadinbrzezinski]

15. Exactly, but we are talking too much inside baseball

I just hope he keeps this up, since he is trying to splain very complex things in a way MOST folks will understand them

[Avalux]

2. Some of us are not enjoying the ride at all - I'm now a statistic.

Every time I hear the number of jobs lost last month I cringe because one of those hundreds of thousands is me.

FDR had to fight like hell against a very ugly opposition and he did it. Obama will do the same. My future is depending on it.

[nadinbrzezinski]

4. Our future is riding on it

And I do sincerely hope you soon become the statistic for recovery

[Avalux]

6. Yes - every single one of us

and thank you for the well wishes. :hug:

[Blackhatjack]

7. Rode by the local soup kitchen and homeless shelter this past weekend....

We are well on our way to 1933 again.

All those people in line for free food and a place to stay overnight are going to be hitting the streets in protests before long.

Obama mentioned tonight that ads in Elkhart IND are directing people to food banks, and that the food banks have insufficient supplies to help everyone.

It is going to be getting a lot worse quicker than anyone predicted.

[nadinbrzezinski]

9. We members of the Cassandra club said it was going to get that bad

(though I am hoping that the measures will keep it at the 1983 level, which was bad enough... but not quite 1933)

Anything in common? Oh yeah Republicans...

[roamer65]

12. Create $2T and reinstate full welfare benefits along with a massive food stamp program.

That will get the economy going.

[Greyhound]

13. Thank God it passed! n/t

[nadinbrzezinski]

16. We would be in worst straits, not that most people get it

historically that bill had a lot of common WIHT EARLY NEW DEAL legislation. some of which also had problems

After all the core legislation that we associate with the New Deal wasn't passed UNTIL AFTER the 1936 election, but I am proof positive YOU KNEW THAT NOT.

[Zynx]

17. Quite true. A lot of the early New Deal legislation wasn't great.

For example, heavily regulating industrial and agricultural prices probably wasn't productive.

[nadinbrzezinski]

18. A lot of it made the stimulus package passed by the previous congress

look like a gem... and in theory it wasn't that bad. It was HOW it was carried out that many of us went oh oh... but I am almost positive I can say we'd be in worst straits if we didn't get some of that going.

Was it well done? No, not quite..

[Greyhound]

19. LOL!

Whatever the suckers want to hear, huh?
:rofl: