There is a lot of debate right now directed at the state of the economy: Are we going to experience a “double-dip recession”? or, Can this “recovery” hold up?
First of all, isn’t it hard to believe we’re in “recovery” when so many people remain unemployed, still above above 9%? I’ve heard people talk about a “jobless recovery” – but what does that mean? How can you recover without consumers returning to work? It just doesn’t make any sense. And quite frankly, I don’t know who makes up these rules and defitintions.
It is true, indeed, that interest rates are low – but who can get the money? It’s impossible to get a loan right now unless your name is Corporate America. Does that sound like recovery?
Regarding this nonsense about a double-dip recession – it’s just propaganda, something to make you believe reality doesn’t exist. We’ve never moved out of recession. We have never recovered. A double-dip recession, therefore, is impossible to transpire.
Conventional wisdom defines recession as two consecutive quarters of GDP contraction – a condition where the entire market economy shrinks for six consecutive months. So by conventional wisdom, the U.S. doesn’t qualify as recession.
But, man, does it feels like one!
Why?
Because, my friends, we are in recession – and have been for some time.
From 1995 through 2007, free-market activity accounted for 80% of GDP. Ever since the market crashed in 2008 free-market activity has been in decline, now accounting for just 74% of GDP. Here’s how that looks (scaled.)
THE PROBLEM WITH THE MARKET IS THAT IT’S UPSIDE DOWN!!! AND THAT’S WHY THE STOCK MARKET IS ACTING CRAZY!
Think about it. During the heyday of the 1990’s, President Bill Clinton, and the internet boom, U.S. government spending averaged just $1.5 trillion per year. And for the last several years of his presidency, Clinton produced multi-billion dollar budget surpluses – not deficits.
But today, and after eight long years of free spending under President G.W. Bush, our government now spends $3.8 trillion per year, while generating unsustainable trillion dollar budget deficits.
Yet GDP remains relatively stable. Why?
Because our federal government is artificially inflating our economy to make it look like the market hasn’t shrunk – when it has! Actual free-market activity has lost six percentage points in the last few years leaving reckless government spending, poor fiscal management, and sloppy monetary policy to replace it. What’s wrong with this picture?
WE THE PEOPLE ARE IN RECESSION. THEY THE GOVERNMENT ARE IN EXPANSION.
That’s assbackwards.
Until these conditions are corrected, we will remain in recession and the stock market will continue to portray irrational behavior and extreme volatility.
It feels like a recession because it is a recession.
Hold on to your socks…