Economists and journalists have been discussing the possibility of the U.S. entering a recession amidst the COVID-19 pandemic. Some have even gone as far as to say we could enter a depression. Here’s a breakdown of the difference between a recession and a depression, and why we’re likely in a recession, but not headed for a depression.
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Recession Vs. Depression: What’s The Difference?…(read more)
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Recession Vs. Depression: What’s The Difference?
In the world of economics, the terms recession and depression are often used interchangeably, but they actually refer to two distinct economic downturns. While both are characterized by a significant decline in economic activity, there are key differences between the two.
Recession
A recession is defined as a significant decline in economic activity that lasts for a prolonged period of time. This includes a decrease in gross domestic product (GDP), a rise in unemployment, and a decline in consumer spending. Recessions are a normal part of the economic cycle, and are often caused by a variety of factors such as high-interest rates, inflation, or a decrease in consumer confidence.
During a recession, businesses may cut costs by reducing their workforce, cutting wages, or decreasing investment in new projects. Consumers may also cut back on spending and save more, which can further exacerbate the economic decline.
One of the key characteristics of a recession is that it is temporary, typically lasting for a few months to a couple of years. Governments and central banks often implement various policies and tools to help stimulate the economy and bring it out of a recession, such as lowering interest rates, increasing government spending, or implementing tax cuts.
Depression
A depression, on the other hand, is a more severe and prolonged economic downturn. It is characterized by a more significant and long-lasting decrease in economic activity, high levels of unemployment, a sharp decline in consumer spending, and a general feeling of economic despair.
Depressions are less common than recessions and are often caused by more severe and systemic issues such as a financial crisis, stock market crash, or a collapse of the banking system. The most famous depression in history is the Great Depression of the 1930s, which lasted for almost a decade and had a profound impact on the global economy.
Unlike recessions, depressions are much harder to recover from and often require massive government intervention and intervention by central banks. This can include significant fiscal stimulus, public works projects, and financial assistance to struggling businesses and consumers.
In summary, while both recessions and depressions are characterized by declines in economic activity, their severity and duration are what set them apart. Recessions are more common and temporary, while depressions are more severe and long-lasting. Understanding the differences between the two can provide valuable insight into the state of the economy and can help inform policy decisions to combat economic downturns.
The real depression will be next year, 2024. It's going to hit hard because we have gone soo long without a real down turn in the economy. Good luck
Did anyone else notice that in 3:02 they show the GTA V jewelry store?
They should do sit-ups where the upper part of the abdomen is worked, with the legs raised and trying to touch the feet with the hands and its variants that work the upper part of the abdomen, they will see improvements quickly. That upper abdominal exercise will take away your depression and anxiety, it will also heal your mind….
Trump 2024
0:55 2 quarters of negative gdp growth is a recession? You don’t say!
Trinston was here ..
Remake this video during bidens term lolll I bet ya wont hahahah
We are doomed now bring back the cheeto
Well.biden made sure its a depression..just look around at real facts…like cash register companies who normally sell 200nto.500 a month have for the last six months sold less than 10 a month.mmeven the 2ndary market shows no sells
Recession is when your neighbor loses his job.
Depression is when you lose your job.
Recovery is when Biden loses his job.
THE USA ECONOMY WAS IN TROUBLE WHEN SOMEHOW JOE BIDEN BECAME PRESIDENT AND DEMOCRATS GOT CONTROL. THE DEMOCRATS RUIN EVERYTHING. JUST LOOK AT THE STATES THEY RUN
Who is now watching in 2022?
Its a manufactured "crisis". A scapegoat so they can intentional destroy economy and bring in Great Reset
We'll know if we've entered a new recession on July 28th
All these so called experts were far off the mark. No recession yet in 2022. Leads me to believe that even experts can be wrong. Yes, a recession will come, the question is when ?
Depression is defined as long term recession, years or decades. The evil of depression is long term unemployment. In 2020, depression was avoided by pandemic relief cash from the government, investment in healthcare business, surge of stock values and crypto-currency.
TRUMP just hinted on Fox News, it may be worse than a recession.
Funny they had videos like this when trump was president and now things are worse and …crickets!!!!
Recession is you being sad.
Depression is you being depressed
This was not from a public health scare or crisis, this was from a horrifically unconstitutional shut down by our criminal government in response to a virus they helped create with our tax dollars. But those are just details.
Recession is just a recess.. depression is you really need to see a doctor
Corona virus ?? That was last year buddy that was to hurt the economy tbh Haven’t heard nothing about that virus since the war you know that distraction war !
Recession started before the covid in USA
They pushed the covid around the world so everyone is effected.
That way USA does fall behind too much from China and Russia.
"The longer we step back from economic activity,the faster we will recover from this" is the most idiotic statement I have ever heard.Wake up and stop drinking the kool aid and start thinking for yourself instead of letting the "powers that be" do it for you!!!
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There is a good deal to be learned by studying how depression triggers aligned in the past. So, to understand why the "Great Depression" occurred in the 1930s, one must look at what occurred during the years building up to the crash.
A significant amount of the credit made available during the 1920s went into land speculation. A good primer on what occurred is found in the book "Only Yesterday" by historian Frederick Lewis Allen. Not only did investors become captured by the frenzy of the Florida land boom, this same frenzy occurred in many cities in response to population increases that triggered a significant increase in the demand for both commercial and residential land. An agricultural land boom also occurred during the First World War, during which time farmers borrowed heavily to expand their land holdings and production. A few years was required after the war ended for European farmers to recover, but by the mid-1920s global production exceeded demand, prices fell, farmers defaulted on loans when government guarantees were removed, and rural banks failed by the hundreds.
As the land boom crashed, investors shifted heavily into the stock market, driving up prices well beyond what any fundamentals supported. Thus, by the end of 1929 the U.S. economy was stressed across almost all areas of production as well in the financial markets. To be sure, imprudent bank lending deepened the crash and lengthened its duration, but it was a crash in the making because of the failure to utilize tax policy to tame the credit-fueled, speculation-driven land markets. A few economists (e.g., Harry Gunnison Brown, Scott Nearing and John R. Commons) had argued the case made in the late 19th century by Henry George, who showed that cyclical booms and busts would be tamed only if the full or nearly-full public capture of the potential annual rental value of land and of rents from other sources (e.g., the broadcast spectrum) became public policy.
Harry Gunnison Brown was joined over the succeeding decades by a small group of economics professors who continued to make Henry George's case. One could argue that recessions that began again following the end of the Second World War would have been even worse if local governments did not capture some land rent via the taxation of real estate. However, as land prices climbed property assessments rarely kept pace. This made speculation in land an even more profitable investment.
Relying on out-of-date assessed valuations rather than current market values created a serious analytical problem for government statisticians. They simply did not understand that any increase in the price of land is inflationary and did not include such increases in their calculation of inflation. Another failure has been to accurately calculate the annual aggregate rent that is privately captured as unearned income (whether imputed or actual). Since the administration of Ronald Reagan, the federal government has not monitored land prices. The figures utilized in the econometric models relied upon by the Congressional Budget Office and the Federal Reserve are around 5 percent of the actual potential rent in the economy (see Joseph Stiglitz or Mason Gaffney on this particular problem).
I offer here a very rough estimate of the rent attached to just one part of the economy, the residential property market. At mid-2020, the median price of a single-family property was around $295,000. There are about 140 million existing housing units in the United States. If we assume a fairly conservative median land-to-total value ratio of 35%, this means that the aggregate residential land value in the U.S. is $103,250 per property, multiplied by 140 million = $14,455,000,000,000 ($14.455 trillion). Economic theory tells us that this aggregate land price occurs because of the capitalization of the net amount of rent that remains in private hands after taxation. If most or all of the rent were captured via taxation there would be nothing to be capitalized and land prices would fall to very close to zero. What the rent fund might be depends on the discount rate. If we assume that investors will invest in land if they can obtain an annual increase of 5%, the the rent fund would be calculated as follows: 5% of $14.455 trillion = $722.75 billion of rent JUST for the land under existing residential buildings. Add in the number of vacant residential lots around the U.S. and this figure will increase considerably.
Tragically, the public capture of land rent never became public policy, allowing the land market cycle to operate from boom to bust. It is on schedule to crash again in 2026. I have prepared a relatively short video in support of this forecast for anyone who reads this and has an interest in more details:
https://www.youtube.com/watch?v=fmA6ZPs-wus
Would be nice to interview these same folks again now, want to hear their thoughts now that we're in 2021.
Recession- pay cut
Depression- unemployment
Now, is it a health crisis, or a fearmongering crisis?
It's interesting to look back on older videos…
I am 28 and unemployed since last 28 years..
who else got lost @2:43
It's not a depression yet but it's really close.
Print more money and pass it on. It has worked before. Lol.
Recession or depression you loose the Perks on Life