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July 01, 2009

The 'Great Recession'

There's a new term going around to describe the economic situation we've been in now for over a year, and it's the "Great Recession." Is this characterization of our economic situation just hype, or is there a real reason to call this economic downturn the Great Recession.

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, of course we are a society that likes to hype things, but I think there is a real reason to call this the Great Recession. I think it aptly fits what's been going on. First of all, this has been a long recession. It's probably going to last at least two years. That's, for example, over twice the length of the last recession we had. Secondly, this has been a deep recession. We're probably going to lose, potentially, up to 4 or maybe 5 percent of our collective income. Consumers have seen 20 percent of their wealth taken away. And then lastly, this has been a recession . . . it's been the first economic downturn since the 1930s when the financial sector has been so adversely affected. I think that's really what made this recession very, very austere. So I think, yes, just like it's counterpart, the Great Depression of the 1930s, I think it's very apt to call our situation now the Great Recession."

Posted by Dave at July 1, 2009 08:00 AM