What is the difference between a recession and a depression?
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Scuba Steve asked:
What defines either? When do we know that we are in either a recession or a depression? What barometer is used?
Brian
What defines either? When do we know that we are in either a recession or a depression? What barometer is used?
Brian
June 25th, 2009 at 5:36 am
Barometer? Lol
Economists should stop borrowing words from real sciences like physics, it just show they are making up this stuff.
A depression is just a recession, but bigger. Arrogant economists like to use arbitrary definitions like a recession means 2 quarters of negative growth. Why 2 quarters? Why not 3? I guess a depression means 10 quarters of negative growth or whatever number milton friedman made up.
June 25th, 2009 at 5:39 pm
In a recession you cannot buy all you need let alone what you want. Credit is tight.
In a depression the situation is worse. Most likely you do not even have a job. The money you have in investments or in the bank may be going down or at risk. That is somewhat alleviated by FDIC guarantee for bank accounts. Small amounts of money are quite safe.
But Pension Assets held by CALPERS and all other big pension plans have tanked right down the tubes, also a sign of DEPRESSION.
So we are in a very bad recession which is showing the vital signs of a depression, and that is for sure.
Lack of regulation and scamming crooks, so far scot free, started all of this.
They made bundled specious assets of all types, took huges cuts as a plart of the action and folded these into golden parachutes, hundreds of millions in salaries and bonuses.
They are guilty of TREASON, but no one but a few seem to understand.
They only understand the small criminal who hits you over the head with something and steals you wallet with a small amount of money.
They never understand the REALLY BIG CRIMINAL.
Nor do they understand the politicians and other fat cats who allow all of this.
And now they will have to pay the results of their misunderstanding.
It requires EXPERT, HONEST, BELIEVEABLE, COMPREHENSIVE help to avert a depression.
It will be a SEVERE RECESSION for sure. How much worse depends on how bad things get before world and national financial leaders get a handle on it.
In the USA it depends on how bad things get over the next six months or so while we are switching to a new President.
The new President will need HONEST, EXPERT advice from creative people who understand macroeconomics from the standpoint of the welfare of all as opposed to the welfare of the fat cats and crooks.
Even then the new President will have a very tough field to plow, because resources have already been squandered.
Having said that, I must add that it is possible to fix it. The fixers must get on their knees and PRAY to God for the proper inspiration to go with their expertise and their honesty.
If the crooks are NOT kept out of the fix things will go from bad to worse, to worse, to something unbelievable.
But it can be done properly by a new administration.
As for the present one, I have lost all faith….
June 26th, 2009 at 7:17 am
A depresssion is a really bad recession, but is usually reserved for times of hyperinflation, which hasnt hit us yet, so technically we are still in a recession, but dont worry…its coming
June 28th, 2009 at 3:17 pm
A recession is when a can of soup is four dollars. A depression is when there is no soup.
June 28th, 2009 at 9:46 pm
Economic down turns use to be called banking panics because the were characterizes by bank failures followed by a year of more Of economic decline, but after some very hard times around the turn of the century it was decided that this term sounded to dismal so they decided depression instead. After the 1930’s the term went out of use to describe current condition and recession was used instead, and depression is reserved for what happen in the 30’s. People now ofter refer to the “banking panics” as recessions because they have forgotten what a banking panic really meant, but what is happening now is a banking panic in the original meaning
July 1st, 2009 at 3:30 am
GNP/GDP growth is one of the main “barometers” for how an economy is doing. A couple of quarters of shrinking GDP means a recession and a big decline in GDP - like 10% - is a depression. For more information diffen it at