How would a recession affect the average American?

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recession
toucansam456 asked:


The last time the US was in a recession, as I remember as a young child was in the early 90’s under the first Bush. I don’t understand how exactly a recession affects the economy, and how it differs from a depression.

Joan
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    • This entry was posted on Friday, June 26th, 2009 at 2:45 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

    « How is the average American affected by the current recession?
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    No Responses to “How would a recession affect the average American?”

    1. GhettoBlaster Says:
      June 29th, 2009 at 4:12 am

      I don’t know either dude but my azz is getting kicked hard as I have big $$$$$$ invested in real estate. My portfolio is losing weight by the minute.

    2. is it 5 yet? Says:
      July 1st, 2009 at 10:23 am

      slowing economic production means fewer workers are needed, thus an increase in unemployment. It also means less money to spend, so less business for those self-employed.
      So how does the average american fare? well he is more likely to lose his job or see a decrease in income, but just more likely. On average, many people will not be terribly affected, perhaps see a slip in thier retirement account.

    3. Lynne D Says:
      July 2nd, 2009 at 8:55 am

      Higher unemployment, worse in some industries than others. Stagnated or decreased wages. Decreased capital income to investment accounts and savings accounts. Prices don’t escalate as much as they become more difficult to reach because of a devalued currency.

      Assets depreciate, which tends to hit housing the worst. Housing is a big block of asset, instead of something like stocks which can be sold off at small losses per share. You can’t sell a piece of a house. You can only sell the whole thing.

      With rising unemployment, stagnated wages and frozen activity in assets, leading banks to lend less money, it means housing prices will REALLY descend.

      But don’t get too excited over that if you’re not a homeowner, thinking you’ll be able to get a house cheap. If you depend on wages for your income the most, you won’t see enough of an increase in your wages or enough opportunity to increase your wages to attract lending for that purpose.