Actually unemployment has climbed to new highs, and recession just doesn't mean contraction, it actually means below a certain percentage of growth. Lowering the interest rates has helped some sectors grow, but other sectors of production are down. The deficit grows, the debt grows, and that makes govt. spending grow. It's fine if you believe it has improved, I guess we just disagree.
The only problem is that the people who the tax plan is weighted toward had enough money to invest and spend even before the tax cut. If they weren't spending it and investing when they 10 million dollars, why would they do it when they have 11 million?
ok, i have taken a lot of economics classes so far in college, being an Int'l Political Economy major, and the common definition of a recession that i know of is two consecutive quarters of negative growth in output (of course there are different ways of determingin output, but i don't think that is the point). what definition of recession are you referring to? i am not trying to be rude or turn this into a pissing contest, but i still dont get though how you can say things haven't improved. at the time, the economy was contracting and unemployment was rising at near-record levels. now there is growth in many sectors, and while unemployment is still rising, it is rising at a much more subdued pace. new weekly jobless claims (just over 400,000 last week) are nearly half of what they were at the height of the labor market downturn. the economy is obviously not healthy right now, but how is that not improvement? what do you expect to happen, all of the companies around the country to just all of a sudden just start hiring people right and left and spending money like they did in the late 90's? also, secretary snow said they are expecting 3% growth for the 2nd half of 2003. except for the late 90's, that is a solid growth number historically and if, and i admit that it is certainly a big if, that continues it will only be a matter of time before the labor market turns around. keep in mind also, that 400,000 new jobless claims is not as bad as it sounds. 400,000 is generally considered by economists as the marker of a stagnant labor market, or the approximate level between a growing labor market and a contracting one. thus, we dont have to move far forward as an economy before the labor markets are considered stable.
I thought it was consecutive quarters below 1.5% or 2.5%. I can't remember exactly. You may be right that it's just a decline and not bound by certain percentages. I think the problem may be that there are mulitiple definitions. Some only involving GDP, and some that use employment figures and other economic indicators as well.
Dude, I'm getting $20.23 more a paycheck. I just went and bought a CD to celebrate. TAKE THAT, you anti-tax cutite.
Confidence is the problem right now. Nobody is confident about their future. Most people are taking a wait and see approach including business so they are not investing. Look at a company like Dell, they are making record profits, but are they investing? The answer is no. They also barely gave any raises this year. Most people didn't even get cost of living increases. That is because Dell is not sure what is going to happen to the industry so they are not willing to invest in something they are not sure is going to make money. So no spending, no raises, and very little hiring. Microsoft has over 30 billion dollars in the bank. Do you think some tax cuts will cause them to invest it? I don't think so. The only thing that will cause them to invest it is confidence that they will make money from it. In other words, someone will buy what ever they produce. Something has to drive that demand. Another thing that makes it worse is the dot com bubble. During the dot com era, investors were only concerned with growth. Investors didn't care about profit as long as the company was growing like Amazon. However, after the bust, investors are now hypersensitive about profit. There are only two ways to increase profit and they are to increase revenue which isn't happening right or to cut expenses. Companies now have to cut expenses including investments and employment to increase profit which is good on a microeconomic level but terrible on a macroecomic level. Things will not get drastically better until people and businesses are more confident about the future. Something has to drive this confidence in the future. During the 90's it was the internet, personal computers and Bill Clinton's uncanny ability to make people feel good. That is the biggest criticism I have about Bush. His gung ho additude divides our country, and no one feels comfortable about the future. He just doesn't make the average person feel good so they can go out and spend money and invest. I trully believe that the first role of the a President is to be a cheerleader. He or she needs to make Americans and other countries feel good about America. Reagan and Clinton had that ability, the two Bushes and Carter didn't.
The problem is that the economy is still bleeding jobs, so things will get worse before it gets better.
Of course it is hard (or impossible) to know but I would say the odds are better that things get worse before they get better. The rise in the stock market over the last few months probably has more to do with the fact there isn't any other place to make money--the money in bonds has probably already been made and interest on cash investments is miniscule. Further, there hasn't been substantial gains in jobs, productivity, corporate investment, etc that would really suggest we are on an upward trajectory. Plus, the Fed really is about out of ammunition for it to do anything other than be a cheerleader and we have probably has got all the boost in consumer spending (especially autos and home purchases/refis--which has up and till now held better than most other areas and been a saving grace) we can get from such moves. Seems to me the government and most self-interested fanancial institutions are more hoping/wishing for a rebound than actually seeing economic indicators suggestive of a rebound. Again, who knows, but what has happened in Japan or our country in the depression and the energy crises (where it takes like 10+ years for the market to get back to where it was) could be happening here. I hope not, but I think the best we can hope for is very modest growth where on the other hand there are some really big elephants possibly hanging over us. Of course LT (30+ years) I am not too concerned and am steadily putting retirement money in stock funds, but I am definetly also creating more cash savings for the short term (<10 years) and avoiding debts (except tax deductable mortgage)--who knows maybe I'll be able to take advantage of falling prices and deflation if it does occur pretty soon.
