July 16, 2011
Is This the Worst Economy since the Great Depression?
Data indicates that we are in the midst of the worst economic downturn since the Great Depression of the 1930s. But is this true? And more importantly, how did we even get to the point where we have to ask? During the past thirty years, we have had four significant recessions starting about 1980, 1991, 2000, and 2008. Economists define "recessions" as two consecutive quarters with negative growth in Gross Domestic Product (GDP). An alternative definition recognizes an increase in the unemployment rate of 1.5% within 12 months. A severe recession with a decline of 10% of GDP or one that is prolonged for 3-4 years can be considered a "depression." Expansion and contractions reflect the normal business cycle that underlies the national economy. While politicians do seek to minimize these swings, they are rarely successful. The Bureau of Labor Statistics and Congressional Budget Office provide data. In 1980, the national unemployment...(Read Full Article)