By Katy Granath Posted December 17, 2008
Monday, December 1, the National Bureau of Economic Research announced that the United States had been in an economic recession since December of last year.
However, on Black Friday many local business owners reported that their sales were solid. But Nevada has not been spared from the most recent recession. According to the Nevada Department of Employment, Training & Rehabilitation, “Nevada’s unemployment rate rose again for the sixth consecutive month, hitting 7.6 percent in October.” The national rate is 6.7 percent. Elko County had the lowest rate at 4 percent.
The word recession has been thrown around quite casually, but a whole new gravity accompanies the term now that this recession is official.
Countless Americans have been feeling the effects of this economic downturn since last year, so an ofﬁcial name for their financial difficulty hasn’t come as much of a surprise.
A recession is a period of economic decline during which the value of the goods and services produced by a nation falls for six straight months. The value of all goods and services produced by one country is its gross domestic product (GDP).
As GDP declines, proﬁ ts often decline, and businesses layoff employees to cut costs. The employees also cut back on their spending which causes a lack of demand, which in turn translates into a steeper decline in the GDP. It can take more than six months or a year to pull out of the vicious cycle.
Economists believe this recession could last some time and might be quite severe. A particularly long and relentless recession can be deemed a depression, but only if it reaches a certain intensity. It is important to remember that a recession, or even a depression, will in no way be a sequel to the Great Depression. After the economic catastrophe of the ’20s and ’30s new regulations and safeguards were put in place to prevent a second Great Depression.
Currently, steps are being taken by the federal government to “rescue” the American economy. Congress recently passed a 700 billion dollar bailout plan that establishes an Ofﬁce of Financial Stability. Through this ofﬁce, numerous ﬁnancial salvaging programs will be run. One part of the plan will assist homeowners to avoid foreclosures.
Unfortunately, no solution or bailout package is going to provide a quick ﬁx for this situation. “Things are going to get worse before they get better,” said President-elect Barack Obama recently. However, the new leader lso mentioned in the same speech that Americans have what it takes, the character, the optimism, and the will, to make it through these troubled times.