Modern Economic Nonsense — The self-fulfilling recession

The global economy is in a tailspin. To make matters worse, everyone knows it will likely only get worse before it gets better. Consumers are afraid to spend, businesses are afraid to hire, and banks and investors are so scared to invest. In these times of peril, the best way for companies to deal with risk is to cut back on expenditures and remain as liquid as possible. Unfortunately, that’s not exactly what’s happening. The global recession is becoming a self-fulfilling show that everyone wants it to arrive, but it may never do. There may not be an official declaration from the U.S. Department of Commerce or the Bureau of Economic Analysis but rest assured that we’re currently in a state of recession. The first thing you should know about a recession is that it’s not the same as a depression or general economic malaise lasting years or even decades (like the Great Depression). A recession is generally understood as a sudden decline in economic activity — as measured by things like unemployment or retail sales — that lasts no longer than six months. Now that’s good news because if a recession was anything else we might all be out of jobs right now. The bad news is the recession may already be here that we just can not predict after the confirmation.

Defining Recession

A recession is defined as a period of two consecutive quarters where economic growth has been negative, or if GDP shrinks by more than 10%. This can be attributed to a number of different factors, such as increased tariffs, an unstable housing market, or a general oversupply of goods and services (which is referred to as a “stimulus glut”). In essence, a recession is a drop in the overall pace of economic activity. A recession is generally understood as a sudden decline in economic activity — as measured by things like unemployment or retail sales — that lasts no longer than six months in usual. However, some recessions may drag longer than we anticipated.

Why We Should Be Thankful We’re In a Recession Right Now

Economists usually say we should be thankful we’re in a recession because it’s a sign of an efficient market. But in addition to that, there are many specific reasons why we should actually be thankful that the global economy has…