what happens in a "Recession"?

[onethatcares]

the nuts and bolts of it. Do banks stop loaning, businesses quit hiring, cities stop funding infrastructure projects. Should we just keep pushing along or what?

I don't understand or I wouldn't ask this question.

Thanks

[Yavin4]

1. Everybody, people and businesses, cuts back severely on their spending

which makes the recession worse and could eventually lead to a full blown depression where prices plummet.

This is where govt comes in to replace the lost spending.

[SharonAnn]

16. It is said "Wealth returns to its proper owners"

In other words, the rich end up richer and the poor and middle class get poorer.

[DBoon]

2. people lose their jobs and have a hard time finding a new one

People who keep their jobs don't get pay raises and may get pay cuts

If you find a new job, chances are it will be for a lower pay and you will be accepting a less desirable position

If you are over a certain age, you may lose your job and never find a new one.

If you are under a different age, you may find yourself living in your parents' home much longer than you bargained for.

[Meadowoak]

4. We must have been in a recession for all of my adult life.

[dalton99a]

3. There is a domino effect; unemployment goes up, consumer spending goes down, etc.

[Meadowoak]

5. The silver lining is, the president usually gets blamed for a recession.

Couldn't come at a better time.

[sinkingfeeling]

6. Are you too young to remember 2007-2009?

[Johnny2X2X]

7. People lose their jobs, their houses, and their retirements

We had a good economy for 10 years, but real wage growth barely moved the needle for the working class, so people are stretched so thin going into this recession that too many have no buffer.

[unblock]

8. a "recession" just means that the economy produces fewer goods and services than it used to.

so for a while, instead of growing, the economy contracts.

there can be many reasons for this, one of them being the economy simply has great but unsustainable growth for a number of years. businesses build too many plants order too many machines, hire too many people. and consumers rack up debt as they're not worried about paying the bills while the economy is great.

then when the economy is not great, everyone cuts back. consumers buy less, preferring to save and pay down debt, especially if they're worried about losing their job or actually lose their job. businesses lay people off or at least slow hiring down because demand has slowed down.

modern conventional wisdom is that this is a good time for the government to step in a spend like crazy to stimulate the economy, which can indeed work to end a recession. however, recessions generally last only 6 months to 2 years or so, so it might already be over by the time a slow-moving government actually gets money into the economy.


keep in mind that "the country" being in recession refers to a national average. your state or your industry might be better or worse than the national average.

[lame54]

9. America has survived numerous recessions...

But can she survive Trump

[Grasswire2]

10. and at a time when safety nets are more needed than ever...

....Republicans will consider a recession reason to cut spending again. Families will be living more like The Waltons.

[kairos12]

11. Belt tightening by all creates a cycle where

demand for goods goes down, which in turn, produces layoffs, which in turn causes people to tighten their financial belt even further.

The cycle continues until the psychology of economic fear is broken.

Financial belt tightening is a good idea, unless everyone does it at the same time.

[onethatcares]

12. then owning a home

with no mortgage, payed down credit cards, owning vehicles outright, and having cash savings in a financial institution is a good thing at that point, correct?

that describes where me and my s.o. are at this current moment in life.

[Liberal In Texas]

17. I think you're as good as you can be.

We're the same, except we still have a mortgage which I wish we could have paid off, but it's not as big as some peoples and the house is unlikely to ever go underwater in the neighborhood we're in.

[book_worm]

13. You've been a member since 2004 and you don't know what a recession is?

[Cartaphelius]

14. My guess is

that they were here just to look at the pictures.

[onethatcares]

15. been here since the 2001 debacle but

don't have the educational background to put into words what I understand and what I don't, That's why I ask questions.

I made it through the reagan years, barely. Worked maintenance in a hotel and they did renovations at that time. During the 08 mess, I lost a job on a construction crew due to scaling back of property owners not doing add ons, etc. at that time, again, going into maintenance on condos saved my working butt.

I asked because I wanted to expand my thinking.

Is that oK?

[Karadeniz]

18. No...it's perfect!❤

[ck4829]

19. Good question, we all need to know