Recession or Depression in the USA?

@dlkuku (1936)
United States
February 2, 2008 8:02pm CST
With gas and oil prices skyrocketing, the housing market in a huge slump, unemployment at an all time high, I am fearful our country is headed in a depression. The economy is so bad, food costs are up, people can't afford the basic neccesities, like medicine, or even health insurance. Forclosures are on the rise while plants and businesses are either closing their doors for good or outsourcing to other countries. It's a sad state of affairs our country is in. I don't want this discussion to turn into a huge political debate of whose fault this is. Besides, my thoughts are that we can't lay all the blame at the President's feet, I believe that Congress also should take responsibility for the issues that have been on the table for months, some even for years, like Social Security and they haven't really done anything about except bicker and fight without resolving anything. I also blame Corporate Greed for the loss of jobs, I blame banks for not helping people keep their homes, oh yeah, I know they are businesses, but what it comes down to is that the mighty dollar is more important than people. So what do you think? Do you think that this country will rise out of this recession or fall into a depression?
1 person likes this
9 responses
@goldeneagle (6775)
• United States
3 Feb 08
We are in a recession for sure...it is hard to say how this is going to turn out. I would have to agree with you on some of your observations, however, I am in disagreement with you on some of them as well. I agree that all of the blame can't be placed on the President, but I think he could have definitely done more during his administration to help the working people of this country. Congress has wasted millions of taxpayer's money bickering instead of using their time to work on things that really matter. I think the President and Congress are primarily to blame for the economic conditions in our country today. They are primarily to blame for the gas/oil prices, and they could do a LOT more to lower health care costs. Now, for what I am in disagreement with you about... Corporations and banks can't be blamed for the condition of our economy. The bottom line is that businesses and banks are in business for one reason, and one reason alone...to make a profit for the people who have taken the risk of investing their money into the business. Also, it isn't the bank's responsibility to help people keep their homes. It is the responsibility of the homeowner to make the payments they agreed to when they signed their mortgage agreement. Sometimes, if businesses aren't making money, the answer is to lay-off workers to cut costs until business improves. The foreclosure process is the method that banks use to recoup the money they have loaned to homeowners to finance their homes when the homeowners can't make the payments. It isn't the bank's fault, and it isn't the business owner's fault that we are in a recession. If anything, the banks and the businesses suffer during these times. Businesses and banks don't make any money when people aren't spending. The Federal Reserve has been adjusting the prime rate and the discount rate trying to stimulate the economy, however, I personally feel that the Fed is doing more harm than good, because the stock market panics at every move the Fed makes. The DOW Jones Industrial Average, the basis by which US markets are generally judged, have shown dramatic losses soon after the opening bell of the markets each day that the Fed has announced its rate cuts. If the Fed wants to stimulate the economy by getting people to spend money, then they need to do convince Congress to do something about things like the cost of Gas, health care, and things of this nature. So, these are my personal views...take from them what you will....
1 person likes this
• United States
3 Feb 08
ooppss...I almost forgot to answer your question about whether or not we will come out of this recession...I think we will come out of it...but I also think it will get worse before it gets better. I don't think we will end up in another depression (although, at the rate we are going, I don't think it is totally out of the question), but don't expect things to get any better until the government does something about the cost of gasoline and the cost of healthcare.
@dlkuku (1936)
• United States
3 Feb 08
Thank you for your upfront and honest observations, it's nice to see that people can discuss differences of opinion without arguing. And on some points maybe I wasn't quite clear. On the banks and corporations end, I do understand they are businesses, and they are there to make a profit. What I am referring to, and I should have stated this in my original discussion, is the shady dealings that some banks and businesses practice in. For instance, subprime lending, which as anybody who watches the news knows has caused a huge mess for a lot of people. Personally, I don't believe in adjustable rates, the only time I have seen these rates adjust is to go up and up and up. And with corporations I have seen so many instances where they have lied to their employess that it sickens me. For example, not long ago here, a major plant was bought out. The new owners stepped in and told the employees, 'we are not going anywhere, your jobs are safe'. A few months later, they were closing the doors for good because the company sent everything overseas. My husband's employer has also lied, strung it's employees along, moved people around across the nation saying that it was a one time deal, a year later they were doing it again even though in their words, it was a one time deal. Now they are promising more restructuring, more layoffs, more permanent job losses, and more transfers. We moved 500 miles because of this, bought a house, and now they are saying we may have to move again. This has caused a tremendous amount of stress for many working men across the nation, and their families. Maybe I am a bit bitter right now, but I don't think it's right that a corporation can play with people's lives like this. Yes, the corporations are in business to make money, but who is it that makes the money for them? It's the little guy working hard for his paycheck, without people like us, they wouldn't have a business. Thank you again for your response, I try to keep an open mind about things, and I believe that we should be able to state our opinions without bickering like Congress. LOL
• United States
3 Feb 08
Bickering like Congress solves nothing. Unfortunately, those of us who know this are, for the most part, too poor to get elected to office. I am also certain that our congressional representatives would take the time to read all the letter that we are so often encouraged to write to them expressing our views and opinions. LOL Adjustable Rate Mortgages (ARMs) are good for certain situations, but as a general rule, I don't recommend them to the average customer. ARMs are usually marketed by offering a low rate at the start for a certain period of time. However, at the end of this time period, your rate increases to a ridiculously high rate. This is called "ballooning." Now, an ARM may be a good thing if you know that you will be able to pay off the loan before it balloons. This may be ideal for real estate investors or businesses, but it is usually not a good idea to for the average person to get into. The reason ARMs earned a bad reputation is because banks saw an opportunity to cash in by recommending them to people who were trying to get financed for homes. The plan they pitched was that the homeowner would agree to the ARM at first, then try to refinance with a regular mortgage before the ARM ballooned. The details of loans can often be hard for people to comprehend, or may be hidden in the fine print, so it is important for bank officials to make sure people know what they are agreeing to when they sign the loan agreement. So, what happened was that the homeowners couldn't get refinanced when the time came, and when the payments went up as a result of the ballooning, the home owners lost their homes because they couldn't make the payments. As for your comment on the jobs being sent elsewhere, I know people who have been affected by this. One of the main problems we have with this is when jobs get sent overseas. Thank Ronald Reagan for this problem, because he is the one who signed the NAFTA agreement in the 1980's. Otherwise, businesses will often relocate to different areas for multiple reasons. There again, it all goes back to the bottom line. They are hoping to increase profits by reducing operating costs. This is especially common when a merger or corporate buyout takes place. Let's say that a company buys out a factory in your area. They probably already know in advance that they are going to relocate it. Now, this may mean that they have to break down some equipment and ship it to the new location, but they also know that they can sell the old building(s) that housed the business, use the money they get from the old building to make a down payment on the new building and to finance the set-up of the new establishment. The basis behind this decision is that they can often get cheaper labor, and if they are lucky, they can get that cheaper labor in a location closer to where they will be shipping the new products than the old factory was. All this will equal lower mortgage payments on the new building, lower salary costs, and lower shipping costs...which all equal more profit to the business when all the numbers fall into place... I don't necessarily agree with it as being a good business practice, but when you own a business, you can do with it as you please, and all decisions go back to the bottom line...boosting profits to investors and business owners...
@david2005 (800)
• Canada
4 Feb 08
I think that the economy is just fine and if everyone keeps running around and trying to fix it they are going to create a problem.
@dlkuku (1936)
• United States
4 Feb 08
I'll tell myself that the next time I am at the gas pump or when the bill collectors are at my door. *walks away shaking head*
• United States
3 Feb 08
I think we'll fall into a recession (if we aren't already there), but I think that the previous experience of a major depression has taught everyone (especially economists) that we can't rely on "paper money". Remember how crazy how our stock market got in the 20s and again in the 90s? It'll right itself, but it will take time. I really think that the culprit lies within those in charge that believe that money grows on trees and that our country can keep popping out those dollar bills--I mean, just how much is the war going to cost before we're done? And who put the US in charge of fixing everyone else's woes? Who helped us during the Depression? Who helped fix the world's ills the way we have? We (as a country) contributed more to tsunami relief than Katrina relief and that's in our own back yard? Sheesh, no wonder it's so screwed up in the world!
@dlkuku (1936)
• United States
4 Feb 08
I have an idea, maybe Congress should stop voting themselves raises, I think they make enough money considering they aren't really working on the REAL problems that real people face and they are getting paid from our tax dollars. Why don't they put their raises to a vote by the people? Talk about useless spending, it's right up there with earmarks. And you are right, our country is always the first to help everyone else, they need to start helping people here.
1 person likes this
@sid556 (30999)
• United States
3 Feb 08
I hope i am wrong but i bet this will get worse before it gets better. It is pretty scary really. Everything is going up but our paychecks. I barely get by and I know others that are not getting by. I'm not sure what it would take at this point to turn everything around but it would have to be a group effort for sure.
@dlkuku (1936)
• United States
4 Feb 08
It would be nice if our paychecks went up along with prices.
• United States
3 Feb 08
I wonder if we will see a change in the price of gas once Bush is out of office. I also wonder if the government sees this happening to people, I kind of feel like it's a second running of "Well let them eat cake!" Maybe I'm completely off track, but it just feels like it. Things are just going down and nothing is being done to address it. We need a president to stand up and help us middle class and lower people who are struggling to make ends meet. I think we will come out of this recession as soon as someone makes the effort.
@dlkuku (1936)
• United States
4 Feb 08
Maybe we should ask Exxon what they think since their profits were in the billions last year. I don't know that Bush really controls the gas prices. I think that some of these people who work in Washington should go live with someone poor for about a week just to see what life is really like. And yes, we do need a president who will stand up for us, unfortunately I don't see that happening either.
@gemini_rose (16193)
3 Feb 08
I live in England and I too am worried about the direction our country is headed, things are exactly the same here and its all I hear about on the news. We were hoping to move to a new area but all we hear is that the housing market is dropping in price and so I know that for now we would be best to stay put. Our gas and petrol prices have too gone sky high and whereas once we would just hop in the car and go here there and anywhere, now we have to consider how much it will cost and can we afford it? The weather has turned colder and the gas costs have gone higher, we now panic about having the heating on and have to constantly check the meter to ensure we are not using too much, same with electric. It is sad and its also scary to think how easily and quickly things can change from good too bad, I am not sure what will happen, but can only hope that things get better quickly before its too late.
@dlkuku (1936)
• United States
3 Feb 08
Thank you, in recent weeks from watching the news and reading I have become aware that it's not just here in the USA that things are bad, but across the globe. My husband and I used to take road trips on occasion, but now with gas prices we just can't afford to. And as for home heating, I am using electric heaters because I just didn't have the money to put oil in the tank. I don't know how poor people are heating their homes. For some it comes down to a decision between eating and keeping warm. Maybe the ones in government should go stay with some of these people for a week or two to see how the other side lives. Maybe then they would realize just how bad things are.
• United States
3 Feb 08
I wonder if we will see a change in the price of gas once Bush is out of office. I also wonder if the government sees this happening to people, I kind of feel like it's a second running of "Well let them eat cake!" Maybe I'm completely off track, but it just feels like it. Things are just going down and nothing is being done to address it. We need a president to stand up and help us middle class and lower people who are struggling to make ends meet. I think we will come out of this recession as soon as someone makes the effort.
@aesopm (306)
• Indonesia
3 Feb 08
I dont know exactly, but based on book "October 2015 Imam Mahdi will come". There are some prediction: 2010 = USA troops will leave Iraq and will attack other nation or country. 2014 = World War 3 will begin. 2015 = Imam Mahdi will come that will come to fix this world 2018 = Nabi Isa (Jesus) will come back to this world. 2019 = USA will collapse 2022 = Israel will collapse That's based on the book, the book take source from Al-Quran, other holly kitab, history, other general info, and matematic calculation.
@polachicago (19073)
• United States
3 Feb 08
It is very complicating issue. Yes, we can blame president for wasting out tax dollars. As far as big corporations, yes, with all outsourcing and making huge profits, they don't even pay taxes. Bank are official robbers with easy loans to non qualify customers. President is nr 1. for me to blame, number 2.banks, number 3. corporations