Global Recession is Upon Us
Even though we have yet to be declared in a “technical” recession, there are experts and analysts from around the globe insisting that the developed world — including the U.S. — is in a recession. The Organization for Economic Cooperation and Development (OECD) is also reporting that this is the first time in more than 30 years that Europe, Japan and the U.S. are all in recession during the same year.
It appears that the ripples that started with the subprime lending crash last year are spreading ever further. CNN Money reports on the global recession:
“The OECD area economy appears to have entered recession,” said Jorgen Elmeskov, director of the policy studies branch and the OECD’s economics department. He said that while the picture was uncertain “projections point to a protracted downturn” with recovery not likely before the second half of next year, with the U.S. leading the way out of recession.
It is somewhat reassuring for some that the United States is expected to lead the global economy out of its funk. Although it only makes sense, since the U.S. was the first to really show signs of the economic trouble.
In order for the U.S. to be able to lead the world out of this global recession, however, a few things have to happen:
- Housing market needs to stabilize. The housing market needs to stabilize and foreclosures need to be prevented. However, it is only fair that as the government helps those that might not have made the best decisions, that others are helped as well. If stimulating spending is the way the government wants to get us out of this mess, providing those who are not in trouble, but who have onerous terms, with refinancing can open the way for more disposable income — and more spending.
- Restore confidence in the market. Right now, there is not a whole lot of confidence in the market. Some sensible regulations may go toward creating a sense that people can trust investments again. Of course, companies will need to be propped up.
Of course, both of these assume that we need to avoid a depression at all costs, and that spending more money is the answer.
Do you think spending more is the answer?
