The top economists at the National Bureau of Economic Research have announced that we are, indeed, in the midst of a recession. In fact, the country has been in a recession for a year now. Following the announcement, the stock market tanked and the Dow plunged nearly 700 points. Nicely done.
The economic downturn (or, for those in the know, the sh—t storm) may have escaped your attention if you decided that 2008 was the year for you to cut yourself off from society, shed all material belongings, live off the land, and grow your own food.
Actually, that gives you a pretty good head start.
The report put forward by the nonprofit organization defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough.”
The U.S. economy reached that peak of activity back in December 2007. Between “trough” (where we are now) and “peak” (the glory days), the economy is considered to be in an expansion. This one started in November 2001 and lasted 73 months. Well, I certainly hope you enjoyed it.
In layman’s terms, this means that what goes up must come down. Kind of like mercantile dysfunction that unfortunately cannot be treated by even the strongest of pharmaceutical drugs.
If you’re a chronic pessimist like myself, you’re trying to physically and mentally prepare yourself for the inevitable downward spiral and depression that follows a recession (the economic one, not the psychological one, but that could certainly happen as well).
For obvious reasons, the NBER does not have a formal definition of an economic depression, although they will say that 1929 wasn’t exactly a good year, what with the total collapse of the stock market, Hooverville, bread lines, and old Mr. Potter of Bedford Falls.
Being the true patriot that I am, I plan to stimulate the economy through massive and irresponsible consumer spending. I figure if I go broke and my credit completely dries up, I can always ask the government for a bailout.