Today's betting pool question. The government lied for over a year about the recession before someone finally had the?

Today's betting pool question. The government lied for over a year about the recession before someone finally had the balls to stand up and admit we were in one. How long will the government put on a happy face and lie before admitting we are starting a depression?

news.yahoo.com/s/nm/20090207/bs_nm/us_us... months? 6 months? A year?

Asked by Schelli 34 months ago Similar questions: Today's betting pool question government lied year recession finally Science > Social Science.

Similar questions: Today's betting pool question government lied year recession finally.

Actually, using the most common definition of recession, it couldn't be proven we were in one until the end of January. The most common definition of recession is: A period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters. The US GDP didn't start shrinking until the third quarter of 2008, which would make depression's onset about six months later than the official declaration.

However, the National Bureau of Economic Research is considered the official designator of the onset of recessions. And their definition is a bit more expansive: A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Of course, this leads one to wonder why most economists use a definition other than the one used by the official declarers.

I imagine because only looking at GDP is much simpler and easier than GDP and income and employment and production and wholesale sales and retail sales. When you look at only one number, there’s little scope for argument; when you’re balancing a half dozen of them against each other, there’s room for interpretation and argument. Arguing over interpretations is why the guys who run the NBER earn the big bucks.

If you think the definition of recession left room for intrepetation, there’s even less agreement on the definition of a depression. I thought I’d check the NBER for a definition of depression, and the best I could find was a scanned image of a paper, published in 1983. I’ll transcribe the bits I’d usually copy; hopefully I’ll catch all my typos!

;) A depression is a "Big Mac" recession. Fortunately, unlike many Big Macs, they are rare! .. The longest, from 1873 to 1879, lasted sixty-five months.

The second longest, from August 1929 to March 1933, lasted forty-three months, which is one reason why it became known as the Great Depression.. . In a class by itself is the Great Depression -- longer, deeper, and more widely felt than any of the others. Next are two major depressions, 1920-21 and 1937-38.

They did not last very long, but were very severe while they lasted, and nearly all industries reported declines in employment. Every other definition of depression I’ve seen reads similarly: A depression seems to be a super-sized recession. Since the average length of an American recession (the NBER’s data set goes back to 1854) was 17 months, if the upturn begins in May 2009, then we’ll merely have had an average-length recession.

Of course, that seems unlikely. About half the nation’s people have begun to change their economic thoughts to depression psychology. While he hasn’t (to my knowledge) used the word, President Obama’s economic talks are full of worry about averting a depression.

From the 1983 paper, we see that unemployment in the "two depressions" hit 16%, and the Great Depression hit 25%; similarly, GDP dropped by 13% in the "two depressions," and 33% in the Great Depression. As I write this, unemployment is "only" 7.6%, which puts us closer to the "five sharp recessions" rate of 7%. And GPD has only dropped 4.3% from its peak, which is also closer to the "sharp recession" drop of 3% than the minor depressions.In short, the numbers don’t support the conclusion that we’re in a depression.

Only the psychology does. This means we might still be able to prevent one. Sources: http://www.investorwords.com/4086/recession.html http://www.nber.org/cycles/recessions.html http://www.nber.org/chapters/c0689.pdf http://wwwdev.nber.org/cycles/cyclesmain.html http://www.bls.gov/news.release/empsit.nr0.htm http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm Murstein's Recommendations The Return of Depression Economics and the Crisis of 2008 Amazon List Price: $24.95 Used from: $15.95 Average Customer Rating: 4.5 out of 5 (based on 33 reviews) .

Economics is not a hard science. It's a soft science....and depends on backwards measurements and forward projections. Economics is not a hard science.

If you put a measured amount of water on a measured amount of heat for a measured length of time, it will boil. You can do that 20 (or 20K) times, and the water will boil every time. (At high altitudes, the measurements of time/temp will change.) That’s hard science: every experiment will yield the same results, no matter who performs the experiment.

Economics is a soft science. You can’t do the same thing at different times, in different locations, and expect the same result. Recessions can only be diagnosed by looking backwards: if indicators are down for 2 months, it’s a downturn.

If indicators are down for considerably longer.........it may be the economy is heading into a recession. Down longer? Then it’s a recession.

Economists generally recognize the nature of predicting/projecting as an inexact, soft science, acknowledging that forecasting is their weakest activity: stumblingandmumbling.typepad.com/stumbli... Recovery is the same: it can only be diagnosed by looking backwards. Wall Street doesn’t know where the bottom is: the bottom is diagnosed by looking backwards - with upward indicators repeated over a period of time, then financial types and economists will say "we seem to be coming out of this recession. Looking backwards works really well.

It’s looking forward that’s tough. (If I had only realized $10K invested in Microsoft’s IPO would make me a multi-millionaire, I would have bought in. Same for Home Depot.

How I wish I had bought the Home Depot IPO.......one I considered buying, and was afraid I would lose money. ) And it’s not necessarily government economists who declare a recession: Wall Street economists and college-and-university afilliated economists make their opinions known, based on their evaluations of the economy. You will likely find differing opinions early into a recession, with some economists saying downturn, others ready to say recession.

And during the slide down, or the climb back up, there will be different opinions as well on whether or not we’re in a recovery. Soft science: many philosophies, lots of opinions, and only hindsight to say what has happened. There are many economists who disagree: who feel economics is a hard science.

But economics deals with people, with free will of those people to buy, save, use credit, spend wisely or unwisely. It’s the variables - the human variables - that make economics a soft science. http://economistsview.typepad.com/economistsview/2007/06/is-economics-a-.html Think of the philosophies of economists: what do we want?

"People looking for easy, no-cost, free-lunch solutions to a range of problems often disagree with economists," says Swan. http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3589 Right now, there are some economists who are predicting a recovery by summer.......whether or not anything is done by government at all. There are others who believe that massive injections of government money is necessary for the troubled economy to recover.

Let me sum this up with the hard science of math and the soft beauty of poetry: "To think that 2 and 2 are four, and neither 5 nor 3, the hearts of men have long been sore.......and long are apt to be". That’s economic theories..........each tells the present economic status and the future economic status as s/he sees it. Neither right nor wrong for now.........but looking back, right and wrong will be more clearly seen.

Not lies. Just differences of opinion. And just the benefit of hindsight.

There is no accepted definition of a depression Whether or not we are in a recession is not determined by the government but by the National Bureau of Economic Research. Last December they decided the economy had peaked in December 2007 and has been in a decline. nber.org/cycles/dec2008.html There was no lie since it takes a long time to make a valid determination: Q: Typically, how long after the beginning of a recession does the BCDC declare that a recession has started?

A: Anywhere from 6 to 18 months. The committee waits long enough so that the existence of a recession is not at all in doubt. It waits until it can assign an accurate date.

There is no definition of a depression: Q: Does the NBER identify depressions as well as recessions in its chronology? A: The NBER does not separately identify depressions. ... The term depression is often used to refer to a particularly severe period of economic weakness.

Some economists use it to refer only to the portion of these periods when economic activity is declining. The more common use, however, also encompasses the time until economic activity has returned to close to normal levels. Above quotes are from wwwdev.nber.org/cycles/recessions_faq.html Sources: http://www.nber.org .

Everyone knows the shape the global economy is in. What the hell is the difference what word we use to identify it? Can you explain why the almost obsessive desire, for some, to have the word recession used?

And, if that's an important factor in the way the world spins, why not have a committee come up with a definitive explanation of exactly what criteria is required for a "depression".

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.