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By Jeremy Schiffres, Daily and Sunday Freeman, Kingston, N.Y.

Tuesday, March 3, 2009

Not so depressing

An Associated Press piece I read on the Web this morning suggested that, amid all the talk of the United States being in a recession, we may actually be in a depression — a severe economic downturn not seen in these parts since the 1930s.

Here’s a news flash for the writer: We’re not in a depression. In fact, we’re not even in a recession yet, despite the oft-repeated lie that the current downturn started in late 2007.

A recession, by virtually every economist’s definition, does not exist until there have been two consecutive quarters of economic contraction — that is, back-to-back three-month periods in which the United States’ “gross domestic product” becomes smaller rather than larger.

If you buy into all the silly exaggerations, you probably think the GDP has been moving in reverse since the final quarter of 2007. In fact, the GDP expanded in the final quarter of 2007, as well as the first three quarters of 2008. The only negative quarter we’ve had — and it was a doozy, I’ll grant you, at minus-6.2 percent — was the final three-month period of 2008. That means a recession will not officially exist until the government confirms the GDP also contracted in the current quarter (which I’m sure it has).

Once that data is in, it can be said with certainty that a recession began in the final quarter of 2008 and became official in the first quarter of 2009.

Anyone who tells you the recession began earlier is lying. And anyone who tells you we’re in a depression is just plain nuts.



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