Money
Why Recession Talk is Useless?
By Jason Cunningham
Feb 8, 2008 - 5:09:54 AM

In recent months, there has been a lot of talk about the U.S. economy being in a recession. Unfortunately, the beginning and end date of a recession usually has past by the time the lead economists declare the beginning and end of it.

In everyday life, most people rarely mention the word recession. However, their spending habits, general mood and lack of money may be signs of one. When people are forced to do more production and guaranteed fewer work hours, given a raise that does not keep pace with inflation, spend less money and asked to pay a greater share of their healthcare costs, you cannot tell these individuals that the economy is not worse than the Nation’s Gross Domestic Product (GDP) or Durable Good Orders numbers. The bulk of the current economic data may not reflect the sentiment of the average American. Therefore, we feel the effects of a recession long before it is declared by the economists.

Yes, some Americans can afford to buy a new home in any economy, while the rest of us cannot get a loan from any financial institution, even if we are willing to pay a ridiculous interest rate (i.e. 15%). For others, the increasing costs of living expenses are leading to late payments on bills. This is not good for any of us. Their creditors may be tempted to pass their losses unto the rest of the consumers that buy their products and services. This is part of the reason that economic times are so hard for many Americans in 2007 and 2008.

It would good if all economic data reflected the current pulse of the average citizen. Maybe the (FOMC) Federal Open Market Committee would have been cutting interest rates more aggressively in 2007. The federal government needs to make changes in our economic measures; otherwise, we should expect more homeless people in 2008.