The Economic Crisis

[49ers]

OK thank you I think I'll tell my parents about this

[andrewwski]

Unless they're sheltered hermits living in a cave or something, they'll already know.

[49ers]

well I dont know if they know cause i'm kinda 2,000 miles away from home

[gyourkoshaven]

I'm starting to like this less. The government is bribing people to buy something that they wouldn't buy without the bribe. So in effect, this will only have an effect if it continues forever. Not to mention that when the economy rebounds in a year/year and a half, anyone in need of a new car will have already gotten it, so they could theoretically be in more trouble in 2 years than they were at the bottom of the recession (I'm not saying it's over yet), as the market of people in need of new cars will have disappeared.

[eyeball138]

At this point, I wouldn't say the recession is over either, but that's mainly because the housing market is still so bad. Stocks have been rallying for about the last month, (except for a few bad days like yesterday), and the rate of job loss has decreased. Progress is certainly being made.

[gyourkoshaven]

And I actually think the job market (usually last to recover) could get better sooner than the housing market, because some of these recently implemented (Since the start of the Bush Administration, not saying its all his and Paulson's fault) Federal housing policies are really pointless. I'm more of a pessimist in this case and do think it will drag out for most of the fiscal year.

[eyeball138]

It will probably last the rest of the fiscal year, and I think the effects will continue to be seen for the next few years. The transition has to be made from job loss to job growth, and then it will take a few years for a lot of people to get a job. The housing market could take a lot longer, I agree. It just is in such bad shape. Look at this article: http://www.msnbc.msn.com/id/30699936/

I heard something very similar on CNBC just the other day. It's going to take a while for the housing market to improve.

[gyourkoshaven]

Part of it's that we completely over-constructed and there is way too much supply and no demand to buy something that everyone overprices.

[blue cobra]

Personally, I think the recession is going to last more than one year from now. I'd be happy if the economy was turning around in 4 years (and happier if I am proven wrong). A big problem is the stimulus. We know long-term it will lower GDP. It was off target and doesn't start soon enough (only 11% of capital spending is in 2009). Way too much money is for sectors that are growing. Then too little money is for sectors that are in serious decline. I think the numbers are 47% focuses on sectors that are growing, 3% focuses on sectors in serious decline, and 38% focuses on sectors that make up 70% of the economy. Too much of it is big, government run projects with a multiplier of less than one. Tax cuts, which it does have some, have a bigger multiplier, hit the economy sooner, and stay helpful longer or even grow in effectiveness. When the Republicans ran their stimulus plan through the models crafted be Pres. Obama's cheif economic advisor, it was cheaper and created roughly double the jobs in only two years, but the Democrats stopped it. The bottom line: it may be bad now, but I'd watch out for 2015
Sorry if I ranted a bit

[eyeball138]

You're saying that you think that the economy will be worse in 2015 than it is now? I'm sorry, but unless there's a crisis similar to the mortgage crisis that started this recession, I can't see how that's possible.