If giving americans 600 dollars a piece keeps us out of a recession...

[Marquette]

I guess it depends upon your definition of the term "decline" related to GDP growth. Does that mean negative, or simply that real GDP growth was down for 2 consecutive quarters?
According to this: decline - Definitions from Dictionary.com
Definition #14 states:
14.a downward movement, as of prices or population; diminution: a decline in the stock market.

I see two red lines consecutively less than the previous one starting in April 2006.

I suppose it hasn't been laid out correctly. From Wikpedia for Recession: "In macroeconomics, a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year."

No negative real growth, as evident from the graph.

From your Dictionary.com reference, I would posit that you're not interpreting it correctly.

GDP is not yet on a downward slope.

Say you have a dollar. The next month you have $1.10. The next month you have $1.11. The next month it's $1.14. The next month it's $1.15.

The growth graph would look similar to the GDP... you couldn't say your money ever declined, though. You ended each month with more than you started.

The next month it's $1.13.

Now, you had a decline... negative growth. It went down 2 cents from your starting value.

 

[cute fuzzy bunny]

Of course, all of this is rendered moot when a year or two from now, after the recession is over, someone goes back and revises the figures to show that we WERE in a recession after all, but thank god we got through it without anyone realizing it until it was over...

 

[Marquette]

Now, to be fair, if GDP falls in H1 of 2008 and we're solidly in a recession (Q1 and Q2 both show negative GDP), then we could look back in Q3 and say "Yep, that there recession started in January". However, any statements around recession right now is either speculation, fear mongering, or both. If you say it, it's speculation, if you hear it on tv then it's fear mongering ;-)

Of course, by the time Q4 hits, Bush will have cancelled the elections and McCain will be in the middle of marching his army on Washington in an attempt to sieze power so it's all sort of a moot point.

 

[myself]

No it doesn't.

No offense, but the definition is clear. You simply misunderstand it.

"Negative" means below zero. In the context of GDP, it means negative. It means the economy shrank, not that the "growth slowed." It means that the GDP in 1 quarter was less than the GDP in the previous one. Which means the change was negative. We need that two happen for 2 quarters in a row for it to be a recession.

In the graphs you showed, the GDP got consistently bigger, every period. It never shrank at all last year. Thus, we cannot possibly be in a recession right now. From each period to the next in the graph you posted, the GDP got bigger.

Like I said, there is no room for opinion or interpretation here. The numbers are right there, and the definition is clear. "Negative" means less than 0. The growth in Q4/07 was 0.6%. That's still positive. The economy grew (albeit slowly). Thus, no recession.

I really don't know how to make it any clearer than that.

Please accept my apologies as I was using this quote from the same Wikipedia article you mentioned: "An alternative, less accepted definition of recession is a downward trend in the rate of actual GDP growth".
While I'm by no means an economics major (not even close), my interpretation of this text was not off.
If you look at the chart, you will see a clear "downward trend in the rate of actual GDP growth" (i.e. the red or blue lines for April 2006 & July 2006 in comparison to January 2006).
I can see your point.

 

[myself]

Of course, all of this is rendered moot when a year or two from now, after the recession is over, someone goes back and revises the figures to show that we WERE in a recession after all, but thank god we got through it without anyone realizing it until it was over...

That too was in the back of my mind.

 

[myself]

Now, to be fair, if GDP falls in H1 of 2008 and we're solidly in a recession (Q1 and Q2 both show negative GDP), then we could look back in Q3 and say "Yep, that there recession started in January". However, any statements around recession right now is either speculation, fear mongering, or both. If you say it, it's speculation, if you hear it on tv then it's fear mongering ;-)

Of course, by the time Q4 hits, Bush will have cancelled the elections and McCain will be in the middle of marching his army on Washington in an attempt to sieze power so it's all sort of a moot point.

But artificially inflating GDP growth through an influx of rebates and more spending doesn't count?
Truth be told, I'm not completely sure how GDP growth is calculated.

 

[Marquette]

But artificially inflating GDP growth through an influx of rebates and more spending doesn't count?

Well, no one has received a check yet, and there's only an assumption on what people will do with said check.

And, sending checks to people in hopes they spend them to keep the economy out of recession would probably be regarded as a Keynesian economic move. If it works, then it's a valid one to be sure.

 

[kombat]

Please accept my apologies as I was using this quote from the same Wikipedia article you mentioned: "An alternative, less accepted definition of recession is a downward trend in the rate of actual GDP growth".

Apology accepted, but there's a reason it's the "less accepted" definition.
I'm not sure where Wikipedia got that information. Keep in mind that Wikipedia is edited and maintained by regular joes, and their fact-checking isn't always flawless.

 

[myself]

Well, no one has received a check yet, and there's only an assumption on what people will do with said check.

And, sending checks to people in hopes they spend them to keep the economy out of recession would probably be regarded as a Keynesian economic move. If it works, then it's a valid one to be sure.

Well, we haven't received it either. Although it appears we should get <strike>$1,200</strike>$2,400 according to what the news is saying.
And it might appear that we basically spent it, although not for Bush's reasons. We haven't updated our PC at home for over 7 years, and very nice laptops at BestBuy were particularly appealing to us (we ended up buying 3 of 'em). Granted, we already budgeted for this, but GDP could care less.

 

[myself]

Apology accepted, but there's a reason it's the "less accepted" definition.
I'm not sure where Wikipedia got that information. Keep in mind that Wikipedia is edited and maintained by regular joes, and their fact-checking isn't always flawless.

Yes, I know. Maybe I'll just go change it so my "less accepted" definition is no longer the less accepted definition.

 

[Marquette]

Apology accepted, but there's a reason it's the "less accepted" definition.
I'm not sure where Wikipedia got that information. Keep in mind that Wikipedia is edited and maintained by regular joes, and their fact-checking isn't always flawless.

It does say where it got it from... " the National Bureau of Economic Research.[1] That private organization defines a recession more ambiguously as 'a significant decline in economic activity spread across the economy, lasting more than a few months.'"

 

[Notmuchlonger]

Of course, all of this is rendered moot when a year or two from now, after the recession is over, someone goes back and revises the figures to show that we WERE in a recession after all, but thank god we got through it without anyone realizing it until it was over...

It seems to work that way every time. Every time a recession roles around its like the end of the world.

God Bless

 

[jIMOh]

A bar owner pointed out to me yesterday (or the day before?) that now a days so many middle class families spend that extra money on soccer, basketball or whatever for their kids, plus the gas to get them half way across town for the games, that money has to come from somewhere, and it's from the money families spend to go out.

As a result the bar business is going downhill, as it's being supported by the rich or by the poor. The middle class no longer has the time or money to go to the bar.

So I will take my $600 and spend it at the bar if you will too.

 

[JohnDoe]

In case this hasn't been mentioned....

...Remember, this is your money you're getting back, and the rebate checks are basically an advance on your 2009 refund. The last time such rebates were sent out was in 2001, said tax expert Mark Luscombe, "a lot of people were upset to see their (next) refund reduced."...

The details on tax rebates - MSN Money

 

[cute fuzzy bunny]

It seems to work that way every time. Every time a recession roles around its like the end of the world.

Ayuh...everyone in office tells us its all good, nothing to worry about, we're not in a recession, but we're worried about it so go spend!

Then its "whoops...I guess we WERE in a recession! Good thing its over now!"

GOD BLESS US ALL!!!!

 

[ESRBob]

I just read the Liz Pulliam Weston article cited above and I'm 'fused'.
She quotes someone as saying that it is really your 2009 rebate given to you early, and thus isn't 'free money'.

But the same article also says it is a one-time tax credit for 2008 given to you now (instead of in 2009 when you file your 2008 taxes).

But a one-time tax credit is 'free money'... it isn't something you were going to get in a rebate, since it wasn't a tax credit before. So it isn't 'reducing your rebate' as the article claims -- without this new law you wouldn't be due this money.

Of course this is all sidestepping the real issue that it's just more govt debt being heaped on our kids generation to pay off some day, but that is a bone for another thread.

Does anyone have the clear info on this rebate? Is it just an advance on something we were going to get anyway or is it really something new?

 

[Zoocat]

I just read the Liz Pulliam Weston article cited above and I'm 'fused'.
She quotes someone as saying that it is really your 2009 rebate given to you early, and thus isn't 'free money'.

But the same article also says it is a one-time tax credit for 2008 given to you now (instead of in 2009 when you file your 2008 taxes).

But a one-time tax credit is 'free money'... it isn't something you were going to get in a rebate, since it wasn't a tax credit before. So it isn't 'reducing your rebate' as the article claims -- without this new law you wouldn't be due this money.

Of course this is all sidestepping the real issue that it's just more govt debt being heaped on our kids generation to pay off some day, but that is a bone for another thread.

Does anyone have the clear info on this rebate? Is it just an advance on something we were going to get anyway or is it really something new?

Just when I thought I underestood how this "rebate" would work, there appears to be another kink. What if you aren't due a tax refund in 2009? Will you then end up owing $600 more?

 

[jazz4cash]

I just read the Liz Pulliam Weston article cited above and I'm 'fused'.
She quotes someone as saying that it is really your 2009 rebate given to you early, and thus isn't 'free money'.

But the same article also says it is a one-time tax credit for 2008 given to you now (instead of in 2009 when you file your 2008 taxes).

But a one-time tax credit is 'free money'... it isn't something you were going to get in a rebate, since it wasn't a tax credit before. So it isn't 'reducing your rebate' as the article claims -- without this new law you wouldn't be due this money.

Of course this is all sidestepping the real issue that it's just more govt debt being heaped on our kids generation to pay off some day, but that is a bone for another thread.

Does anyone have the clear info on this rebate? Is it just an advance on something we were going to get anyway or is it really something new?

As far as the basic 600/1200 rebate check, its a tax cut resulting from raising the 0% tax bracket threshold on a one-time basis. You can earn 6k or 12k more income before you go from 0% bracket to 10% bracket. Not 'free money'. Since the withholding rates remain unchanged, we would be over-withheld without the 'prebate'. If they changed the witholding tables the funds would dribble into the economy over several pay periods which would not produce the same 'rush' for the economy and it would cost employers to tweek everyone's paychecks. It seems to me it could be a real pain if your income increases drastically over the 75k/150k thresholds for full prebate. You might have to give some back when '08 taxes are filed.

All the folks that think it's good to get a huge refund just don't get it, never will. Most folks I know don't have a clue how much they actually pay, they only know if they're writing a check or getting a refund!

 

[dumpster56]

Ah airfare for the summer trip, the 1200 dineros. Yippie confetti drop....

 

[nepo]

Nothing is going to keep the USA out of a recession now. The real question is how this recession is going to end, IMO. Obviously $600 is not going to prevent the recession, too little money too late, and is not going to end it either.

 

[myself]

It seems to work that way every time. Every time a recession roles around its like the end of the world.

God Bless

This just in (well, OK a couple days ago):
The recession watch can now end. It's already here. - Feb. 5, 2008

 

[Notmuchlonger]

This just in (well, OK a couple days ago):
The recession watch can now end. It's already here. - Feb. 5, 2008

Good I plan to celebrate today with a bottle of merlot.

 

[W2R]

Just when I thought I underestood how this "rebate" would work, there appears to be another kink. What if you aren't due a tax refund in 2009? Will you then end up owing $600 more?

The Liz Pulliam article says,

If that's your situation, or you somehow wind up with a check when you technically shouldn't have -- you earned income in 2007 but won't in 2008, for example -- you won't have to pay back the money, said Luscombe, a principal analyst for tax research firm CCH.

So, I gather that even though you wouldn't be due a tax refund in 2009, you still won't owe $600 more.

 

[ladelfina]

USK Coastie & Independent..

The employment figures seem even more subject to fudging than CPI or GDP. Without some kind of expensive and exhaustive census, it's hard to track who has quit looking for work, who's moved from full- to part-time, retired, self-employed, surviving on odd jobs, etc. It also can't measure job quality and security; everyone's pretty much agreed that the jobs "lost" in mfg. and infrastructure are higher-quality than the jobs "created" in fast food and big-box stores.

One good reason to question the numbers is, if real wages are falling.. doesn't that imply more competition for jobs, hence less-than-"full" unemployment? At "full" employment.. it should be the corporations begging for workers, not vice versa.

 

[ziggy29]

This "stimulus package" will stimulate China's economy more than our own. I happen to agree with the OP that IF government is going to hand out $150B it doesn't have to 'stimulate' the domestic economy, public works projects and infrastructure investments are a much better way to spend it. We'd have a safer, stronger infrastructure and keep a lot more people employed. And the money stays here rather than half of it going to China.