Real GDP in America grew by an average of 1.9% a year during the 2000s. This may not sound all that terrible, especially for a decade that saw one short recession and another particularly deep and long one. But it is the economy’s worst performance for a long time. During the previous six decades, average growth was 3.9% a year. Only the 1930s—when growth was a mere 0.9% a year—were worse. And America’s population is growing smartly, so GDP per head has grown a good deal more sluggishly than GDP as a whole. The story is much the same when the growth in Americans’ personal consumption during the ten years to the end of 2009 is compared with previous decades. Again, only the 1930s were worse".
The employment rate outside of farming was also a wash in the 2000s, because it fell by 0.8% where as earlier between 1940 and 1999 in increased by an average of 27% each decade. Furthermore, "in January this year, the number of people who had been jobless for more than six months reached 6.3m", and though the economy has grown for each of the past two quarters, the unemployment rate has only just begun to slowly lower. Though the recession is now technically over, the 2000's economic performance could be a sign for what is yet to come for America in the 21st century. Do you think the Baby Boomers could account for this change, or is it a new economic trend?
If this is a new economic trend, then what will our generation do for work, or will it be necessary for the Baby Boomers to retire? Furthermore, as U.S. Government plans to give out more stimulus money, will the U.S. need to create jobs by expanding exports in order to stop the job regression in the 2000's, as we have discussed in class?
How does this information affect the "Stimulus Plan"? How can America continue to grow at a rate seen in previous decades? Does the end of the Cold War and free trade have anything to do with this slump in economic growth? How do you get the 6.3 million people who have been jobless for 6 months jobs again. Is this really a Great Recession, or actually a Great Re-Depression?
It is hard for me to compare the current financial crisis to the Great Depression. Throughout school we've been taught about all the horrors of the depression, shown pictures of hoovervilles and the long lines at food shelters. And while that may be going on now, it doesn't feel like it is comparable. Don't get me wrong, I know that things are bad and people are suffering, but it is still difficult for me to compare this to the Great Depression.
ReplyDeleteThis summer I worked in DC and in a conversation with one of the employers I was asked about the state of the economy in Detroit, my hometown. I told him that things were pretty bad and that people were definitely suffering from the repercussions of the recession. His response was that if the economic state of the nation wasn't such a major topic in the news you wouldn't think that there was a recession just looking at DC. The recession hit certain regions more than others whereas the Depression hit the entire nation. People are suffering but not to the extent that that they were during the Great Depression.
ReplyDeleterecession means a general slowdown in economic activity over a period of time. Depression is a sustained, long-term downturn in economic activity in one or more economies. So from my opinion, it's not that easy to say this is really a Great Recession, or a Great Re-Depression. I think it depends on the time period of the slowdown in economic activity. Due to the recession, government try to create more jobs for people so they established the Stimulus Plan. A,E
ReplyDeleteI hardly think that are current financial situation is equivalent to the Great Depression. Although we are having some hardships, it doesn't mean that we have sunk to that level yet. People are indeed suffering the way people were suffering back then, but I am pressed to say that the numbers are less. We are not far, however, from reaching effects comparable to the Great Depression if we dont start making better financial decisions and paying off our debts.
ReplyDelete