The GDP dropped 6.2% in the fourth quarter, the largest drop since 1982. Reuters says that a month ago the Commerce Department estimated that the economy shrank at a 3.8 percent pace in the October-December quarter. Whoopsies! [Reuters]
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At this point, the volume (6.2% vs. 3.8%) doesn’t really matter. The economy is shrinking on a regular basis. We’re in a recession, a really bad one. It’ll turn around. We’ll survive.
@humphrmi: Probably. But “surviving” isn’t all it’s cracked up to be.
@humphrmi: With our elected officials doing their best to prolong the misery, it’s only going to get worse.
@humphrmi: NO WE WON’T! STOP ACTING LIKE IT ISN’T BAD WE’RE GOING TO BE EATING SHOES AND BARTERING WITH BULLETS IN TWO MONTHS!
@christoj879: Heh heh, I heard that line on The Simpson’s, that was Season Eight, right?
Reagan is reaching out from the grave to grab our economy and bash it, stomp on it, spit on it till it is dead just like 1982. He ran up the biggest deficit up till that time and gave tax-cuts for his “trickle on you down” theory. He left office with an even bigger deficit than 1982. It is easy to look good running up debt in the short run.
GOPers have some nerve complaining about Obama after Bush II’s giveaway to the rich like Reagan’s.
@savdavid: I disagree. Reagan’s rotting extremities are clearly too fragile to bash, stomp, or spit on anything.
>GOPers have some nerve
The nerve!
As an economist who runs these macroeconomic models on a regular basis, I’d like to point out the fact that recessions are a fact in the business cycles. There are good times and bad times. Bubbles grow and bubbles burst, whether it is tulip bulbs or homes, these things happen. This is not the collapse of capitalism. This is not the next Great Depression. Please read accounts of the Great Depression and compare it to your current lifestyle – We are not living in shantytowns and moving to California to gather grapes. We are not standing in breadlines. This is a simple recession, a natural cycle of the economy.
The difference with this recession, as I have discussed with an official from the IMF, is the government reaction. We are conducting generational theft on an unprecedented level. We are not printing money, we are borrowing money from future generations. Your children and grandchildren will pay for current policy.
@Rugbyjersey: “We are conducting generational theft on an unprecedented level.”
Oh, there’s definitely a precedent. Are you ignoring the cost of the Iraq invasion and occupation just because Bush wouldn’t put it in the budget? As I have discussed with an official from The Supreme Council, the Republicans own this mess, and as long as they stand in a bloc trying to make attempts to fix it fail, they will continue to own it.
@perruptor: You only see one side of the equation don’t you? Open your eyes, blame Bush and the Republicans all you want but that doesn’t make the Obama/Democrat plan any better. It only shows how stupid it is to run up the national debt. Bush tried 3 stimulus packages and they all failed — Obama’s plan will fail too! Oh, we’ll get out of this financial crisis, but not because of the stimulus plan, but despite it.
The Republicans don’t own this mess, the American people do. We’ll survive it too, but at what cost?
@Rugbyjersey: I must have been sleeping during class when the professor mentioned casually that the wholesale self-destruction of our investment banking industry was part of the normal ebb & flow of business cycles, as is the total and complete freezing of our national cash-equivalent accounts for several days.
Phew!
Consumerist, I love you guys, but please, for the love of God, do a decent reporting and mention that it it 6.2% drop *annual* rate. No, we are not shrinking 25% a year.
Just a side note – the more we talk it’s bad, the worse it really gets. Please minimize your gloom reporting. Please focus more on the positives. (Yes, there are some).
@losiek: True. The Repossession industry is experiencing unprecedented growth!
@Trai_Dep: How about people finally realizing pure consumption is bad? How about people valuing time with family more? How about people valuing the jobs they have (majority still works)?
@losiek: Please focus more on the positives.
Yes, Ms. Waters.
@MooseOfReason: LOL
@losiek: Thank you.
If we worried about the negatives in the first place, we could have solved this problem a long time ago.
@MooseOfReason: Yes and no. If we only worried instead of creating added value through our work, we would always be in recession trying to get minimum food and shelter and otherwise be locked up in houses with shotguns. I’m not asking to stop being responsible, just stop panicking and get back to life/work/enjoyment of what we have now.
Anyways – it all started with crappy reporting. The article should say: GDP dropped 1.55% and not 6.2% in 4th Qtr. Stop FUD, get the facts straight.
Worst GDP since the 1980s .The 1980s when outsourcing became the thing to do .The 1980s where the Japanese started eating away at the US car market in chunks; not bites .The 1980s where the unions were basically busted when the air traffic controllers union went out on strike .The 1980s savings and loan scandals .Being compared to the 1980s -ugh .
It’ll only get better if we find new ways to create money and jobs.
They started this road, by creating infrastructure and ending the dumbest bill in the history of this country (besides slavery) Prohibition. This was an epic failure.
I don’t advocate drinking, smoking, or drugs; but when the “war” on drugs costs this country billions of dollars a year, wouldn’t it be prudent to reverse said juncture and thus legalize many drugs (mostly pot) and thus we’d have increased farming production, new tax revenue as we could tax imports of pot, sales taxes, and income taxes on jobs that this new market creates?
(btw I do not smoke pot, so I’m not some crazy pot head with an agenda, not that all pot heads are crazy; Straightedge for life)
@Skankingmike: Interestingly, Milton Friedman – the patron saint of free markets – espoused the same thing. He also wasn’t a druggie, but he said that legalizing and taxing drugs would be a boon for government.
@humphrmi: Another problem with working on infrastructure rather than finding new avenues for money (aka taxes and tariffs) many highways and bridges are being sold to foreign owned enterprises that bring people over on Visa’s as do many other companies that do taxes for government and IT work. Outsourcing as much as they can and then Visa sourcing the rest of the work.
FDR didn’t have to worry about outsourcing or Visa issues.
However, Obama could create a new tariff and tax base on foreign and domestic trade of Pot. This won’t by any means fix are current problem by itself but it will certainly do way more than borrowing against the future from foreign investors.
I do like the idea of creating a smart network for electric cars. This will create a mass of jobs in theory.
I also liked the idea of Buy America as well but we know that’s next to impossible when foreign countries own a majority of debt in our country.
@Skankingmike: I don’t ‘do’ drugs either, but I’m with you on this. Just as long as any user (occasional or constant) does not interfere with the lives of others, directly or indirectly, I say let them have their dugs. But you’ll have a big fight on your hands with the conservative right.
Bottom line, drugs are bad, but if someone wants them, why should we spend billions to stop them.
What do you expect? It’s the Obama recession. When you have no leadership at the top and just a lot of socialists pushing agendas to strengthen their own party and not the people, this is what happens.