The Bureau of Economic Analysis rewrote history on Friday. Along with GDP data for the second quarter, BEA also published revisions to its GDP estimates since the start of 2007.
Bottom line: The recession was worse than originally thought. The economy contracted by 4.1% from peak to trough (Q2 2008 to Q2 2009), up from the 3.9% previously estimated.
The Great Recession has thus solidified its position as the worst downturn since World War II:
As painful as it has been, the recession remains a far cry from the Great Depression, when economic activity plummeted almost 27%:
Which raises an important question: Just how close did the Great Recession get to being the Great Depression 2.0?
Mark Zandi and Alan Blinder took a crack at that question in a paper released last week. Their answer: If it weren’t for aggressive monetary and fiscal policy responses, the U.S. economy would have contracted more than 12% during 2008, 2009, and 2010 — about half a Great Depression (and arithmetically, but not economically, comparable to the demobilization after WW II).
2 thoughts on “We’re Still #1 (Unfortunately)”
Its early, consider the past 3 years as economic foreplay for the Depression ahead. They kicked the can down the road, unfortunately the road is gone, having been replaced by a cliff.
Guess where the can goes now?
There has been no fundamental change in economic policies, trade tariffs, or employment policies since the economic collapse began. If nothing is changed, nothing changes, this would seem simple enough, but in this fantasy world of endless growth and limitiless petroleum, it has been pushed aside in favor of hopium dreams for the masses and massive financial fraud and looting for the elite 10%.
Imagine the government manipulating statistics? I wonder what the real unemployment rate is? I know there have never been more people on food stamps, then the present. I also know the government it expects it to increase by 3 million more people in the next 12 months.
The next decade will make the 1st Great Depression look downright prosperous. Plan for the worst and hope for the best.
Correlate bankruptcies, foreclosures, food stamps, poverty, and unemployment and see if you notice a trend.
one note I forgot, the powers that be, have not officially deemed this current recession over. So when we discuss how severe the recession was, we must change our tense to, how severe the recession is.
We haven’t found the bottom yet. Perhaps this is not a normal recession?
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