Is The Recession Over?

The U.S. government proclaimed it is, announcing a sharp 3.5% rise last quarter in the Gross Domestic Product, the first time it rose in over a year. So is the worst Recession since the Great Depression behind us?

If it is, it's great news for all of us, but especially for the 15 million people who can't find a job or the millions facing home foreclosure or struggling to buy groceries. So is it true? Is the Recession over?

Unfortunately not.

It turns out the growth came from government stimulus and bailouts. Part of it came from the "cash for clunkers" program which spurred auto sales in July and August. But when that program ended, sales crashed.

Another big part of the growth came from a huge jump in real estate sales. However, many of those sales were sharply discounted foreclosures or from sellers that had to match those low prices.

In addition, the U.S. government kept mortgage rates artificially low and in many cases, made guarantees so buyers could get easy qualifier loans with very little money down. First time buyers also got $8,000 in tax credits, a program scheduled to end November 30th.

But fearing that without that tax credit program, home sales will fall into a crevasse, Congress is scampering to extend that first time home buyer program for at least another six months.

Here's the problem. Believe it or not, 70% of the U.S. economy comes from consumer spending for we have shifted most of our manufacturing overseas and now buy from others much of what we used to make ourselves. And until the job market ends its nose dive and people feel comfortable spending their money, no statistical slight of hand will uplift the economy.

No my friend, the government is still borrowing money with both hands and printing it when it can't borrow enough. There is no end in sight to its wild spending on bailouts and weapons and wars as our nation sinks ever deeper into debt.

The good news is we have each other. As people did during the Great Depression, we will help one another get through these tough times to a better tomorrow.

Dick