Are we entering a new age where serious downturns caused by genuine economic hardships can be avoided with piles of cash? Or is this all just putting off the inevitable and potentially making it worse further down the road?
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#Economics #Recession #Inflation
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BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
The term “The Recession We Need To Have” was coined by former Australian Treasurer Peter Costello back in 1990. It refers to the idea that a brief period of economic hardship and recession could actually be beneficial for the long-term health of an economy.
The basic premise behind this idea is that periods of economic growth can lead to complacency, with individuals and businesses becoming overconfident and taking on excessive risk. This can lead to dangerous bubbles in certain sectors, such as housing or stock markets, which can eventually burst and cause widespread damage.
A recession, while certainly difficult in the short-term, can help to reset the economy and allow for a more sustainable period of growth in the future. It can force businesses and individuals to reassess their spending habits and become more prudent, while also encouraging innovation and new ideas that can lead to future growth.
There are a number of key reasons why Peter Costello’s theory continues to be relevant today. Firstly, many economies around the world are still dealing with the aftermath of the 2008 financial crisis, with some countries experiencing slow growth and high levels of debt. A temporary recession could help to create stability and reduce the risk of future crises.
Secondly, technological disruption is creating new challenges for many industries. As automation and artificial intelligence become more prevalent, many jobs are at risk of being replaced by machines. A recession could help the economy to adapt to these new realities and create new opportunities for growth.
Of course, the idea of a recession is not one that should be taken lightly. Fear of a recession can often lead to reduced consumer and business spending, which can in turn exacerbate the problem and deepen the economic downturn. And those who are already struggling financially are likely to be hit the hardest.
However, there are steps that can be taken to mitigate the impact of a recession. Governments can implement targeted stimulus measures to support the most vulnerable members of society, while also investing in infrastructure and other projects that can create jobs and stimulate growth.
Ultimately, the idea of “The Recession We Need To Have” is a controversial one, and it is unlikely that anyone would actually wish for a recession to occur. However, the underlying message is an important one: periods of economic hardship can create opportunities for growth and innovation, and can ultimately be beneficial for the long-term health of an economy.
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What the economy looks like on loan.
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What the economy looks like on saving.
The government has played us.
Unemployment in the US is not under 4%. That number excludes many unemployed….which are still in the pool of replacement (in some cases are scabs) of the employed as well as outsourcing the jobs.
The biggest problem i see facing Australia is the growing level of income inequality and the ever shrinking group of people who can build capital. With rising cost of living, increasing cent and low wages more and people lack the capacity to build capital. Unless you come from wealthy family you are more likely to be trap in living pay cheque to pay cheque. You do not have the ability to have savings or make investments Over the long term this will have consequences such as falling home ownership, larger inequality and the national wealth been concreated into a shrinking group. Australia is a already a class based society but your standard of living will largely be determined by who your parents were. Very few people will achieve any kind of economic movement and yes this will create changes in the political environment
Yes the car industry died and it was all the workers fault. The fact the LNP refused to offer any subsidy (like other nations) and the record high Australian dollar had nothing to do with it. Yes, it was all unions fault and people taking sick days.
You made a lot of points against giving people money because of an emergency but also talk plenty about doing it for bussinesses, one could say it's because bussinesses produce wealth but you already said that it's only if there are customers willing to buy. It left me feeling off, like you were jumping over one of your own points, but that's an assumption based on what Wasn't said
All this sounds and smells so much of “you’ll own nothing and be happy”, especially in the comment section where people agree optimisticaly about portfolios, stocks and etc, when most of the world cant afford houses, food, pay their bills, education, healthcare or even the dream of saving money, not to mention when you save money a war thousands of km from you that has nothing to do with your country erupts and inflation takes it all away
Austrian economists state that recessions will happen and only by listening and acting on people's worries will stimulate the economy. Keynesian economists take pain killers to allow them enough time to have the lower class feel all the pain with their bail outs and court settlements.
Why isn't free college a supply side increase ( more labor) and see demand side increase (higher wages to spend)?
And here we go again — justifying inflation by "people need stimuli to spend their money".
That is a lie. And I am not going to insult you with the explanation, use your brain.
showing empty shelves as you talk about the covid payouts is another lie. Empty shelves were caused by panic, not by people suddenly having the means to survive in the crisis.
"Look at your house and try to find anything that was built by the government, it would be… challenging"
The internet. You know, the thing that you use to spread your myths about why we cannot have a better system. Was literally invented and built (in early stages) by the government.
List of industries best handles by public sector:
That is all.
I think we'll have a extremely bad economical situation down the road.
We're already paying the price via high inflation right now for the Eurozone/ECB and the US/FED artificially buying their way out of the crisis.
I get that the US doesn't want to let airlines go bankrupt for example. But maybe those airlines shouldn't have used so much debt or used better hedging? If a big airline goes bankrupt, it's not like a healthy company couldn't just take it over for pennies on the dollar. THAT would be a truly free market.
The way it is, there's less and less competition. A company like Tesla also just could come to existance because it had the "unlimited credit" cheat.
But eventually, either all this money has to be paid back or some big players will simply declare bankruptcy. That might be easier for some (Japan's debt is mostly held by Japanese, so they can just rob their own people in a similar way Cyprus did in 2010), but would be disastrous for others.
Cue all the baby boomers whining and throwing tantrums in a cruel attempt to shift the heavens and earth themselves to have their way.
Basically this video is, "Poor People should suffer more so Rich People can keep their ill-gotten gains and make even more money by stealing it from the Working Class."
As Andrew Mellon told President Hoover, "Liquidate, liquidate, liquidate.".
This video has a big "some of you may die, but that's a sacrifice I'm willing to make" vibes
actually the car market here collapsed because of the liberal party destroying it, for an economics channel you know every little about economics, society and politics.
British accent sucks! Though Very informative video.
I'm not kidding when I say that the market crash and high inflation have me really stressed out and worried about retirement. I've been in the red for a while now and although people say these crisis has it perks, I'm losing my mind but I get it Investing is a long-term game, so focus on the long run.
The problem is the government debt exploding to cover these self induced fluctuations. The government debt will get bigger during a recession as taxable income declines.
In today's over financialized world, the competition means wealth and capital fall into fewer hands, not necessarily represents better services and better pay. One evidence would be the staggering salaries. Competition can't be analysed properly without measuring the context.
Everyone need to understand that during a recession, we need to have a war, get war loots, sanction and instigate instability on competitors. Those actions are evil but necessary during a recession. Induce inflation so that your debt to creditors becomes worthless and easier to repay…of course we can do this since the US$ is the reserve currency, we virtually exporting our inflation.
Deflation sustained for a half century & it was the most rapidly developing period in history till then, how do people with econ channels not know this???
Only works in countries with tons of people and land. This is why the Asian education systems are sheet
We have basically had three recessions in 15 yrs its getting ridiculous.
I agree competition = better economy, but however recession is not equivalent, nor necessarily forces competition today. It has good intentions and worked well in the 20th century, but in practice it overlooks one major issue emerging in the 21st century–the rise of megacorporation, or those who are "too big to fail".
The concept of megacorporation breaks the underlying assumption of this video–in a recession, every person and businesses generally faces the same exposure to risks and loss of opportunity, and therefore must enter "highly competitive" mode to survive. However coming out of 2008, the already most influential persons and businesses (mega banks/insurance companies and their execs), by holding a gun to the entire economy, gain even more wealth and consolidated even more influence using the bailout from taxpayer money.
The "too big to fail" groups can now be so interweaved with the whole economic structure that a recession is no longer a risk but always an opportunity to expand, while the rest of the society has to compete to survive. Fair and rule based competition can result in better economy, but it might not be a real competition when a group has entered into god mode and is never going to lose.
Some vast part of Economics is descriptions (my opinion and has been since 1980 or so). I wouldn't claim to be an economist any more than a researcher who tortures and kills beagles by the hundreds. Right now, the balance between employees having their choice of employers and employers having their choice of employees is about even. Economists, the ones who can actually open and close money valves and affect peoples lives, find this 50/50 balance intolerable and will take measures to shift that balance of power back to employers having that choice, 75/25 or so — where it is the most of the time — and where they can say the economy is stronk. They describe the U.S. present status as wage inflation and it is, but only partially. More often, I see employees being able to choose their work environment and where they can speak up about harassment and poor safety measures. I'm not a socialist or communist, I just see the political power balance at 50/50 as a healthy economy. What about inflation? I see it controlling itself over and over and over — something approaching a sine wave with quite a long wavelength. Economists prefer a long wavelength bit not sine waves with a lot of amplitude. They very much prefer 13% unemployment to 3% unemployment. I'm not going to congratulate them, or anyone else I find generally repugnant.
You just covered like 5 chapters of Macro Econ in 15 minutes lol. Great vid
It's not interest rates that needs to go up but money printing has to stop or what happened in Germany before WWII will happen in the western economies. You cannot print money as a way out of the current financial deficit.