CHESSNOID

For a year we have officially been in an unofficial recession. The White House, US Treasury, and Federal Reserve all denied it through out the year. Specifically Bush, Bernanke and Paulson refused to utter the “R” word like it was taboo. Americans could see it anyways everywhere they looked.

We are now in a severe recession with record breaking foreclosures, massive layoffs, a falling stock market, and unbelievable state and federal budget deficits. It will eventually get better that’s for sure. It’s not the end of the world. The question is how long will it last? No one really knows but history is a good place to compare and get a timetable.

NewYorkTimes:

The National Bureau of Economic Research — the widely acknowledged arbiter of recessions — announced today that a recession began in December 2007. That means the downturn is now a year old, and no one thinks it’s on the verge of ending.

Here are the longest recessions of the last century:

1929-33: 43 months
1910-12: 24 months
1913-14: 23 months
1920-21: 18 months
1973-75: 16 months
1980-81: 16 months

Economists have been forecasting that the current recession will likely end sometime in the spring (which is, presumably, when some of the new stimulus money will start to be spent). If they’re right, this recession will be roughly as long as the 1973-75 recession and the 1980-81 recession, both of which were 16 months. To find a longer one than that, you have to go back to the Depression.

Theoretically, if this downward cycle did start last December then we have already done 12 months time in recession prison.  Maybe, the economy will let us out on good behavior.

On a personal level, look at your income, prioritize what’s important in your budget, and spend accordingly.  Be sure you put some of it away for a rainy day or in this case for a rainy year.

There definitely is a silver lining during these rough times as there always is.  I think everyone begins to appreciate what they already have and want less material things, and refocus their lives on their loved ones, family, friends, and health.

The best thing to do is hope for the best and prepare for the worst. I hope the new Obama Administration can make a change that will continue to inspire hope and bring the needed change in the coming years.