General Question

Adina1968's avatar

Is the United States of America headed for a depression?

Asked by Adina1968 (2737 points ) July 10th, 2008

Forget recession. Things are going downhill quick! Is a depression coming?

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21 Answers

eambos's avatar

A recession typically lasts 3–6 months. I’m not saying that the U.S. Is entering a depression, but we have been in this “recession” for more than 6 months.

Response moderated
flameboi's avatar

@chris
wow

flameboi's avatar

but, I don’t think we are heading for a depression.

soundedfury's avatar

I’m sorry, @chris6137. Feel free to link to the article you posted, but it’s a copyright violation to re-post it in its entirety.

Stocky's avatar

Technically we arent in A “recession” yet while I agree that things are feeling very tight for me personally but we are not in a recession as it is defined.

“A technical recession occurs when the level of real national output declines over two successive quarters causing a contraction in the total volume of production in the economy. But often a sharp slowdown in the rate of growth of output, spending and income can feel like a recession.”

I like to think there will be an upturn in the next 3 months. But if i knew either way for sure id be making alot more money in a far nicer office

willbrawn's avatar

I think a depression is coming

tinyfaery's avatar

Shhh! If we don’t talk about it, maybe everyone will remain calm and not create a depression.

PupnTaco's avatar

Many states are in a full-blown recession now (California being one of them)... and with the news of Fannie Mae & Freddie Mac’s insolvency, things aren’t looking so hot.

Way to be, Republicans – the party of “business & economic smarts.”

mzgator's avatar

All I know is that people are hurting and suffering so badly down here in South Louisiana and everywhere else in this country.

stevenb's avatar

Its not bad at all here. Granted it is slower than the last five years, but those were five amazingly good years up here. It seems to be going back to where it was before the five year “super good times” it drives me nuts that everyone is constantly saying “oh no its the big bad recession.” If every news show would shut up and quit telling everyone not to spend money and how bad the economy is, I think people would feel much better and keep the economy going better. Its like a self fulfilling prophecy.

itmustbeken's avatar

The Consumerist had a great post today about the looming Freddie and Fannie Apocalypse!

Since economies are tied together much more so than they were in the 30s, its less likely we’ll see something like what happened in the 30s. The Great Depression wasn’t something that happened all at once either. It was a slow and gradual decline of all sectors of business. Perhaps now, instead of a sudden stock market collapse, the increase in fuel prices will be the catalyst to bring us all down a few pegs.

shockvalue's avatar

Well, I sure as hell feel depressed.

SquirrelEStuff's avatar

Id say after today’s news, we are at step 2.
http://www.nytimes.com/2008/07/11/business/11fannie.html?_r=1&hp=&pagewanted=print&oref=slogin

Prof Roubini is even fonder of lists than I am. Here are his 12 – yes, 12 – steps to financial disaster.

Step one is the worst housing recession in US history. House prices will, he says, fall by 20 to 30 per cent from their peak, which would wipe out between $4,000bn and $6,000bn in household wealth. Ten million households will end up with negative equity and so with a huge incentive to put the house keys in the post and depart for greener fields. Many more home-builders will be bankrupted.

Forecasts for GDP growth in 2008/US real house prices

Step two would be further losses, beyond the $250bn-$300bn now estimated, for subprime mortgages. About 60 per cent of all mortgage origination between 2005 and 2007 had “reckless or toxic features”, argues Prof Roubini. Goldman Sachs estimates mortgage losses at $400bn. But if home prices fell by more than 20 per cent, losses would be bigger. That would further impair the banks’ ability to offer credit.

allengreen's avatar

http://creditmeltdown.blogspot.com

i do not beleive the official numbers with regard to inflation, CPI, jobs, ect—i based on 20 years in banking, I beleive we have begun a Depression that will make the last Depression look like a walk in the park.

We have reached peak credit, and peak oil production at the same time housing and construction and finance are imploding. Consumers are maxed out and tapped out and unwilling to take on more debt, and banks are unwilling to exstend credit.

This is called Deflation, similar to what Japan went through 1995–2007.

We are screwed in the short term.

Poser's avatar

Robert Kiyosaki predicts that when the baby boomers start retiring in large numbers, they’ll begin taking their money out of all those 401ks. All those dollars coming out of the market will cause a panic which will drive the market even lower. He predicts that the resulting depression will be the worst in US history.

guesswho's avatar

oh goodness….
I live in AR, and money is tight.! Being a fulltime student doesn’t make my life any easier, but hopefully my education will allow me to get a decent job so I don’t have to worry about the money… And yes! I do. But I think it also depends on the nov election results turn out. Ya know?
i thought that we relied on “the trickle down system”? Maybe I’m mistaken. Can someone she’d light on this( marina )? I thought the people who made the most money were the ones that we were supposed to rely on to stimulate the economy & their money spending/flow thus” trickled down” to lower income/lower middle class, and helped like that?
I don’t know… Im just trying to pay the bills. Bush administation sucks. What happened to the patent that the oil companies bought that revealed how to run engines on water?
I thought that

guesswho's avatar

that was a big issue

Garebo's avatar

I think we are beginning phase 2 of a recession that started in early 2007, I never trust government statistics; we will have the classic bear market rally, optimism or consumer confidence will be renewed, then the economy in two years will be vaporized with high interest rates and hyper-inflation.

CaptainHarley's avatar

Not just the US, I think we’re headed into a world-wide recession that’s going to cause major disruption.

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