We Never Really Got Out of The Great Recession

by Justin Weinger on September 2, 2011

As you’ve read here several times (It’s Not a Double Dip, It’s a Depression?, 10 Signs We’re Headed for Another Recession – Or That The Last One Never Ended), I truly believe we never left the Great Recession.

Sure, in the very broadest technical definition of the word we left The Great Recession because our GDP turned positive, and the National Bureau of Economic Research declared back in September 2010 that the recession ended in June 2009.  But, again, their definition of a recession is based on a very technical parameters, mostly centered around economic growth, no matter how fake or unsustainable it may be.

The reason I bring this last point up is because most of the economic growth we saw in late 2009 through 2010 was based mostly on deficit spending – i.e. the Federal government spending money it didn’t have in the hopes of jumpstarting the economy until the private sector and consumer has recovered enough to sustain the growth.

Unfortunately, the part where the private sector and consumer spending picks up didn’t happen and isn’t going to happen for a really long time:

  • Unemployment is still pretty much at the same level as what it was during the Great Recession
  • Housing prices are pretty much at the same point as what they were when the market “bottomed” in the midst of the Great Recession
  • Credit is just as tight as it has been, both for consumers and businesses
  • Companies and consumers are hoarding cash and refusing to spend

So, again, we may have technically put the Great Recession in our rear view mirror, but, in reality, most of us can’t tell the difference between today’s economy and when the economy was falling off a cliff back in 2008.

Please watch this awesome video of an interview with Ken Rogoff, a well known economist and professor at Harvard University.  He’s smart.  And he agrees with me.

Do you agree with me, too? Leave a comment below and, as always, please share this post using the social bookmarking buttons below and at the top of the page, especially Facebook and Twitter.

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