If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.
Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009. THE RECOVERY WAS NOTHING BUT MANUFACTURED AND MANIPULATED BULLSHIT! YOU HAD TO BE STUPID TO BELIEVE IT WOULD RESULT IN ANYTHING POSITIVE THAT WOULD LAST.
It would be disastrous if we entered into a recession at this stage, given that we haven't yet made up for the last recession.
With fewer jobs and fewer hours logged, there is less income for households to spend, creating a huge obstacle for a consumer-driven economy.
Adjusted for inflation, personal income is down 4 percent, not counting payments from the government for things like unemployment benefits. Income levels are low, and moving in the wrong direction: private wage and salary income actually fell in June, the last month for which data was available.
Consumer spending, along with housing, usually drives a recovery. But with incomes so weak, spending is only barely where it was when the recession began.
And with construction nearly nonexistent and home prices down 24 percent since December 2007, the country does not have a buffer in housing to fall back on.
Of all the major economic indicators, industrial production — as tracked by the Federal Reserve — is by far the worst off. The Fed's index of this activity is nearly 8 percent below its level in December 2007.Likewise, and perhaps most worrisome, is the track record for the country's overall output. According to newly revised data from the Commerce Department, the economy is smaller today than it was when the recession began, despite (or rather, because of) the feeble growth in the last couple of years.
Unlike during the first downturn, there would be few policy remedies available if the economy were to revert back into recession.
Interest rates cannot be pushed down further — they are already at zero. The Fed has already flooded the financial markets with money by buying billions in mortgage securities and Treasury bonds.There are only so many times the Fed can pull this same rabbit out of its hat.
WE ARE GOING DOWN AGAIN AND GOING DOWN HARD WITH NOTHING TO SAVE US THIS TIME!