Recession Essay, Research Paper

Recession

Often time s people in this country today, take for-granted the comfort they have established over the past several years. A booming economy and a bull market has set the standard for today s society, giving us an optimistic outlook for tomorrow. However more and more these days, people are starting to use that dirty little word that would make any investor cringe. That little nine-letter word that over the years has toppled giants, crushed business, and sent some into poverty. Like a disease it rapidly moves about, and if not addressed in the proper manner could lead to the death, of a once raging market place. So what is this cancer lurking about in our shadows today? How does it affect you and me? And what is the government doing to protect the working class citizen, in this growingly unstable economy?

Recession, now think about it, when the word comes to mind or the subject is brought about in a debate; the thought is pretty pessimistic, isn t it. For the past eleven years our economy has made record breaking growth. It has turned your next door neighbor into a millionaire, made things bigger and better than they have ever been, and even made the American dream a little easier for some to obtain. However as history shows for every term of upswing there has been an equal and opposite downswing. Many times the thought is over looked, but the fact is the economy is slowing at a very

rapid state. For example the Wall Street Journal reported in one of its latest issues that, the GDP (gross domestic product) in the fourth quarter of 1999 had risen by 8.9%. Only one year later, in the year 2000, the gross domestic product reported in the forth quarter had only risen 1.8%.

So what does all this racket mean for you and me? Well, lets look at one simple economic value that almost every person can relate with, and that is interest rates. Basically it all comes down to the ease of attaining money. An interest rate can be a fixed or variable amount of money that a lending organization puts on money that is loaned to individuals such as you and me. Low interest rates mean it is more profitable for people to barrow money, thus this simulates economic expansion. However dropping interest rates, too much, too fast can shock an economy and do it more harm then the good it was intended.

Today, the government along with the federal reserve must referee the economic game. They call the fouls and set the rules, while trying to be as subjective and fair as possible. We the people elect and hold faith in the individuals that govern today s economy, and therefore should not scorn or throw down the people who administer it. Government, a monopoly over every economy should be thought of as a tool, to further better our economic standing.

Often times, those who have the ability to adapt are the ones who succeed, and everyone else is left as a burden for the rest of society to pick up . A slowing economy will weed out some, and may make an example of others. Often times not to the extreme that I have illustrated, but however minor an economic recession will leave a scare behind.