As TV talking heads and financial wizards warn of an impending economic recession, we thought we’d pause and answer a question, “What the heck is a recession, anyways?”
Technically, a recession is a decline in a country’s gross domestic product for six straight months. In other words, it’s bad, long and has to do with money.
Realistically, a recession occurs when people are in such financial dire straits that they stop spending money on everything from credit card bills to Hawaiian shirts and digital music downloads. Then companies sell fewer products and services, and collect fewer debts. Soon employees are laid off. And the process repeats itself more intensely with each passing cycle. It’s a series of toppling crippling dominoes – that if continues – can lead to a depression.
Back in the early 2000s, a U.S. recession was fueled by a few factors, including the Sept. 11 attacks and the dot-com bubble, which was the failure of websites like pets.com to find a way to sell chew toys cheaply online. And while most SnagABlog.com readers weren’t alive in the 1929 for the Great Depression, you’ve probably seen the pictures of bread lines in history text books and movies like “Cinderella Man.”
Recently, you might have heard or read in the news about the government possibly passing an economic stimulus package. It’s true. Right now politicians are debating whether or not to pass President Bush’s tax rebate plan, which would give an extra $600 to single taxpayers and $1,200 to couples who make less than $75,000 and $150,000 a year, respectively. Of course, this may never happen, or a new, different stimulus plan could be introduced. Some argue this is only a temporary solution, and would further fuel our national deficit.
Many fault the collapse of the subprime mortgage market for recent U.S. economic woes. Former Fed Chairman Alan Greenspan – the man some blame for allowing the mortgage mess to happen – says there’s a 50-50 chance of a recession.
But there’s no use in worrying, right? The good news is that the job market is still healthy. And SnagAJob.com has plenty of employers who can end your job search now.
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