Expert: Steve Hach - 10/25/2008

Question
Hi Steve,   I have heard all kinds of news stories and confused over the outcome of this recession. Some have said it will slip into a depression and some have said it won't make it to a depression and only be a recession but it will be very bad but short lived.
What are these presumptions based on?  If it were short lived, what would make it short lived?

It seems to me that the government and economists seen this coming but did nothing to deter it and they seem to know where its heading and its outcome but continue to act nieve to us citizens. Its unnerving!

Thanks in Advance

Answer
Hi Terry,

There are set definitions for "depression" and "recession" available on the internet via google or wikipedia.  It is always good to look things up before you submit a question because you can get the answer instantly.

The important thing to remember is that definitions are arbitrary and the economic statistics can be manipulated or changed so that the old definitions do not always mean the same thing as in the past.

Many analysts believe we have been in a recession for some time now even if the classic definition has not been met.

It is also important to note that many economists and government people did NOT see this coming and due to a variety of factors many are still arguing that we are not in a recession or headed for one--based on the classic definition.

Best,

Steve