recession for the u.s.a

snappy · 15-10-2008, 08:32 PM

Well america is in a recession . Having not being old enough during our recession to know what went on. What actually is a recession i know the dictionary description but what happens in one.
Also what effect will america's recession have on the world and us.

**DJM83** · 15-10-2008, 09:25 PM

Good question mate i always wondered what a recession.

Nikked · 15-10-2008, 09:31 PM

haven recessions been followed buy wars...?

Auslandau · 15-10-2008, 09:53 PM

Negative growth over three consecutive 1/4's ...... people stop buying or negative spending over a period of time. , means loss of jobs with the housing and car industry being hit first, followed by everyone else. It is a measuring stick to see how healthy an economy is.

Happens after good times depending on how good the times have been .... in this case they have had a wow of a time spending. Money runs out ..... people dont spend, people and companies set up to deal with a certain amount of work find them selves with none .... Job losses follow.

THe flow on effect is big and heaps are effected.

A depression is a double hit of a recession. The last recession "We had to have...." bottomed in '89 and growth continued till about a couple of weeks ago. It is a cycle but is determined on how big a cycle by how good the g'ment is in controlling inflation, spending and there own egos's. What goes up .... must come down!

WARS! They are great for getting out of the big ones (Great Depression) ...... The g'ment can 'produce' heaps of jobs in this industry!

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snappy · 15-10-2008, 10:10 PM

sounds like what our goverment is trying to avoid

Auslandau · 15-10-2008, 10:31 PM

Quote:

Originally Posted by snappy84

sounds like what our goverment is trying to avoid

The idea is right .... give people money back to spend to keep things boyant. Problem is, inflation can increase ..... more money out there, the more expensive things become. Inflation goes up, interest rates go up. Its a balancing act and what Rudd has done could work ..... as long as inflation doesnt become a problem. Someone HAS to pay and it will be those with a mortgage

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snappy · 15-10-2008, 11:01 PM

A bit of a balancing act then. Ive been looking at the housing market for a while now it would not hurt that to slow down a bit .

rodderz · 15-10-2008, 11:08 PM

Quote:

Originally Posted by Nikked

haven recessions been followed buy wars...?

I read an article the other week which said just that. During the depression of the 20's the country was that much in debt and the banks lended no one any money. But the war started, and they started lending money to ammunition factories, machinery manufacturers etc, and the economy snowballed from there in a chain reaction. So in effect, the war ended it

snappy · 15-10-2008, 11:14 PM

Ive allways heard war is good for the economy jut never knew why

mr smith · 16-10-2008, 07:19 AM

Quote:

Originally Posted by snappy84

A bit of a balancing act then. Ive been looking at the housing market for a while now it would not hurt that to slow down a bit .

The only way housing will ever be more affordable is to bring down prices. I belive they are too high and need to be more in line with wages, remember that big business and governments like people in debt, they have them by the balls and can control them. May be this recession will be a good thing. ( yes its comming )

To those looking at getting in to housing, interest rate drops are not what you want, you need decent rates on your savings and pressure put on house prices, this first home grant is a crock of poo and is just delaying the market correction.

SB076 · 16-10-2008, 08:01 AM

I dont think you could say recessions lead to wars, but it could be argued that the depression in the 1930's lead to Hitler and Mussolini gaining power and everyone knows what happened after that.

Wars are not good for the economy, it just that there are bigger problems (people getting killed) and how the economy fairs isnt the no 1 issue.

X000BOSS · 16-10-2008, 01:42 PM

im from a lebanese background and back at my parents homeland, at the peek of their war, there was heaps of money around. plenty of money comes into the country from overseas from all over the place. that means that there is more cash for people to spend and make. not bad through it. so im not sure if it was better for the economy but was definatley better for the general population. plenty of people made "big" money in those days during the 90's.

SB076 · 16-10-2008, 02:29 PM

Think of what the Iraq war and the war on terrorism cost the US, there have been articles stating the US was going to go in recession well before the current financial crisis. Then think back WWII food stamps and rations - the economy suffers during war

Anyway back on topic a recession is as stated above. Things basically slow down, as a result of that people lose their jobs (hence why Rudd has said that unemployment will rise) this leads to other people losing their jobs (people spend less) Government tries to counter this by offering tax breaks and encouraging people to spend. When you spend money on anything you are basically providing jobs for people, when a lot of people stop spending money, peoples jobs are put a risk

DDXR6T · 16-10-2008, 06:17 PM

Quote:

Originally Posted by SB076

When you spend money on anything you are basically providing jobs for people, when a lot of people stop spending money, peoples jobs are put a risk

Exactly, it's like a circle. People earn money, go and spend money, and the money being spend benefits a business. If the money is not being spent, people are laid off, businesses go under, and the world is a bad place.

BTW - Some people in this thread seem to have 'recession' and 'depression' mixed up.

gtfpv · 16-10-2008, 06:29 PM

Quote:

Originally Posted by snappy84

Well america is in a recession . Having not being old enough during our recession to know what went on. What actually is a recession i know the dictionary description but what happens in one.
Also what effect will america's recession have on the world and us.

g'day mate . i'm 39 . and i was 17 @ the 1987 recession that paul keating said we had to have .
let me see . back then houses where i live went from about $55000 to around $90 000- $120 000 over 6 months. ( sydneys west) i remember having $26000 in the bank during this time i invested it in a bank at 18%pa. and houses went up almost 100%. i remeber older people in there 30's and 40's getting 2nd jobs to pay thier $40 000 dollar mortgages @18% pa.
after about 9 months of this bad time , i remember going to work one day . houses were now about 100k i was on abouit 280pw as a 3rd year apprentice anyhow one day i went to work and my pay suddenly went up to 400pw or 40%. all the tradesman went up around $200 0r 380 to 580 pw.
i cannot see %40 payrises and houses doubling this time .
more like the same thing . however in reverse. ie . houses plummeting 30% and wages staying put . making richer people poorer. and giving younger people a chance to be able to live and buy property. otherwise the younger generation wouldntr have a hope . if they have no hope then everyone will suffer.
i hope this makes sense to you.