Recession

villa2010

Is it looking like a " great depression" we man may be entering...?

I have heard that the building industry might be shrinking. We have had several quotes for a building job and all the builders have said they are rammed full with. I also have friends in the building trade who have said the same thing. Is this not contradicting...?

StevieJ

bendix wrote: »

What a strange thing to say SteveJ. Let's face it, you're not the sharpest tool in the MSE Forum, but usually there is some semblance of reality in your posts. This one is just . . well . . just plain unusual.

Why is it strange? you spelt offence as offense in US fashion, like when you use math, BTW talking about sharp tools you come over as a lump hammer

of·fence (-fns)n. Chiefly British Variant of offense.

The American Heritage® Dictionary of the English Language,

Rochdale_Pioneers

We ARE in recession. 0.1% economic growth in 9 months. Inflation around 5%. Wages frozen or falling. People have less money to spend and are expecting to be worse off next year even if they don't lose their job as millions now fear they might.

The continued surprise expressed in some quarters about poor retail or industry numbers is a joke - sales are poor because we're in recession. People are acting like we are in recession because they are regardless of what the official stats say. National economic output is flat. But for most people their personal economic output is in decline, so it doesn't matter what the official figures say, they're acting just like its an official recession anyway.

Thrugelmir

Rochdale_Pioneers wrote: »

We ARE in recession. 0.1% economic growth in 9 months. Inflation around 5%. Wages frozen or falling. People have less money to spend and are expecting to be worse off next year even if they don't lose their job as millions now fear they might.

The continued surprise expressed in some quarters about poor retail or industry numbers is a joke - sales are poor because we're in recession. People are acting like we are in recession because they are regardless of what the official stats say. National economic output is flat. But for most people their personal economic output is in decline, so it doesn't matter what the official figures say, they're acting just like its an official recession anyway.

Cutting consumer debt will result in a loss of GDP. Something the politicians seem to wish to steer clear of.

StevieJ

Thrugelmir wrote: »

Cutting consumer debt will result in a loss of GDP. Something the politicians seem to wish to steer clear of.

I hadn't noticed Davy boy steering clear of that

Thrugelmir

StevieJ wrote: »

I hadn't noticed Davy boy steering clear of that

Somebody needed to break the ice. As does seem the party is well and truly over for a period of time.

villa2010

villa2010 wrote: »

Is it looking like a " great depression" we man may be entering...?

I have heard that the building industry might be shrinking. We have had several quotes for a building job and all the builders have said they are rammed full with. I also have friends in the building trade who have said the same thing. Is this not contradicting...?

Building trade anyone...?

JayScottGreenspan

Rochdale_Pioneers wrote: »

We ARE in recession.

Exactly.

Fewer people have jobs. Those that do have jobs are getting pay cuts (in real terms). Of course the economy is shrinking.

And I don't see things getting better any time soon.

Looking at the three main ingredients, things can only get worse:

Public spending: the squeeze has barely started. Cuts required to get things back to a sustainable level will knock at least 5% off whatever GDP would otherwise be. We'd need a massive private sector boom just to stand still.

Household spending: at least here some of the pain is behind us. But there is more to come as real wages continue to fall.

Credit: the banks have massive undeclared losses on sovereign debt. Goody.

Oh dear.

zagfles

JayScottGreenspan wrote: »

Exactly.

Fewer people have jobs. Those that do have jobs are getting pay cuts (in real terms). Of course the economy is shrinking.

And I don't see things getting better any time soon.

Looking at the three main ingredients, things can only get worse:

Public spending: the squeeze has barely started. Cuts required to get things back to a sustainable level will knock at least 5% off whatever GDP would otherwise be. We'd need a massive private sector boom just to stand still.

Household spending: at least here some of the pain is behind us. But there is more to come as real wages continue to fall.

Credit: the banks have massive undeclared losses on sovereign debt. Goody.

Oh dear.

The truth is there is no easy answer. The problem was caused by "fake" growth based on excessive borrowing. You either make cuts and balance the books now, which will kill growth and be painful, or you carry on borrowing and get a bit more "fake" growth and delay the day the bills come, which will be even more painful and result in an even bigger recession.

The problem was caused by excessive borrowing, you don't solve that by borrowing even more. That's a bit like trying to fix a hangover by getting drunk again.

StevieJ

zagfles wrote: »

.

The problem was caused by excessive borrowing, you don't solve that by borrowing even more. That's a bit like trying to fix a hangover by getting drunk again.

Ironically there is no better fix Have you never experienced 'the hair of the dog' :eek: