Global Recession really over?

[NeonSamurai]

I dunno, I think government can help stimulate the economy and bring a country out of a depression. But its not by bailing out the large corporations and banks (who frankly should be let to die out if they mismanaged themselves).

One of the most effective programs launched during the great depression was the US government starting massive public works jobs. One of the big ones was rebuilding the infrastructure of the country (roads and the like). This did a lot of good things for the country at the time. It put money in average people's pockets so they could spend again (and afford to eat), and it greatly improved the US's infrastructure which it was in need of at the time.

Ironically some parts of US infrastructure are in real need of repair/improvement right now, and if things continue it would be a very good idea for the US gov to implement such programs.


On another note I really don't think the western world is going to return so quickly to their excessive spending ways. Demand has been vastly over inflated in the west by marketing, particularly when it comes to technology. People were convinced by marketing that they needed all this new crap, that they needed a brand new state of the art cell phone every 6 months, that they need to spend 1000$ on computer video cards every year. Large numbers of rather foolish people were getting heavily into debt trying to keep up with the trends and technology. On top of it we have the "i am entitled to everything I want" generations who see no difference between borrowed money and money in hand.

[mookiemookie]

Originally Posted by NeonSamurai

On another note I really don't think the western world is going to return so quickly to their excessive spending ways. Demand has been vastly over inflated in the west by marketing, particularly when it comes to technology. People were convinced by marketing that they needed all this new crap, that they needed a brand new state of the art cell phone every 6 months, that they need to spend 1000$ on computer video cards every year. Large numbers of rather foolish people were getting heavily into debt trying to keep up with the trends and technology. On top of it we have the "i am entitled to everything I want" generations who see no difference between borrowed money and money in hand.

I agree wholeheartedly on this point. We're seeing a secular, as a opposed to cyclical, change in consumer behavior here. They are being buoyed by government stimulus, but that's a temporary distortion and, long term, I expect we're going to see some reckoning. In this current recession, people have lost the "use your home as an ATM" option - home values have been slashed, and still have a long way to go, and credit is still tight from banks ravaged by bad loans. People are re-learning to spend what they have instead of running up purchases on credit. I don't believe that we can have recovery, at least for America, can truly be over until the consumer leads us to it. Consumer spending accounts for, on average, 2/3rds of domestic GDP.

Is the recession over, meaning have we stopped cliff diving in every measurable barometer of the economy? Yes, probably so. Does the end of a recession equate to recovery? No. It's going to take years to replace the job losses that we're seeing and will continue to see for a while. So if you want to call it a "jobless recovery" I think that'd be pretty close to accurate. And if things turn sour again over the next year, they're probably going to look at it as a continuation of the Great Recession instead of a second one.

[Platapus]

I can only speak for my family, but even after the economy recovers, our spending habits will remain low. We were VERY VERY lucky this recession, my family only suffered a little and we have recovered.

However it was a wake up call (especially for The Frau) that we don't need to constantly buy new stuff just because it is new and to really think about our discretionary spending.

I doubt I am the only one thinking like this.

Unfortunately, this means the businesses that catered strictly to luxuries and discretionary spending by the consumers, may not recover to their past levels as people, no longer in a recession, are not as eager to borrow money and/or splurge on that 50" Plasma that we simply "HAVE" to have.