Is Europe's Recession Really Over? 159
jones_supa writes "Bloomberg, the WSJ and the NYT cheered to report that the Euro Zone's economy has showed signs of recovery after two years of decline. They're all based on the news that Eurostat, the keeper of economic statistics for the European Union, says GDP grew 0.3 percent within the EU's borders from the end of March through June. As Olli Rehn, Eurostat's vice president, writes on his blog: 'I hope there will be no premature, self-congratulatory statements suggesting "the crisis is over."' He calls the GDP report only another sign of 'a potential turning point in the EU economy.' The quick conclusion by some economists and some in the news media that a slight rise in one quarter's GDP means a recession is over ignores how experts figure out when an economy is either in a significant downturn (a recession) or enjoying steady growth (an expansion)."
Re:Debt-backed economies.... (Score:4, Interesting)
You are right about passing debt to our children
Wrong. Whatever is produced at a given point in time is available for consumption at that time. We will never send real resources backwards in time in order to "repay" public debts.
The real theft your generation has perpetrated on mine is all of this lost output which can never be regained. Public debt needs to increase so the output gap can be closed.
Lost Output Clock [lostoutputclock.com]
Steady bad isn't exactly good (Score:5, Interesting)
People can weather bad times for a while, many have nest eggs, live off ramen noodles and stay with their parents longer, don't start a family, take more education instead and whatnot to live a subsistence life but those options tend to run out and eventually what they desperately need is a job and an income so they can get on with their lives. That the economy isn't tanking even more is great, but unless there's real growth and people getting back into the labor force it's still going to be a train wreck in progress. The same is happening in the US, before the financial crisis the employment-population ratio was about 63% now it's hovering between 58% and 59%, despite what the unemployment rate says. The US would need another 10 million jobs to return to 2008 levels.
So far I must say that despite everything it has been very calm so far, when you're looking at 27.6% unemployment and 64.9% youth unemployment like Greece does right now many countries would be at "fuck it, communism can't get any worse" conditions. And fat fucking luck if you're going to get a job after years of unemployment, most places will see you as damaged goods and rather hire someone straight out of school. The economy is one thing, it will survive somehow but the people are getting royally screwed. It's a generation almost certain to have it much worse than their parents, despite all the technological advances. And somehow I have the feeling it's just one bad domino away from becoming something much worse, so many look ready to fall.
Re:Betteridge is actually wrong this time (Score:4, Interesting)
Re:Betteridge is actually wrong this time (Score:4, Interesting)
This definition is fundamentally flawed. Under this, it is technically possible for an economy to decline indefinitely which never actually entering a recession. GDP change from quarter to quarter could progress like so
.....
-2.0%, +0.1%, -2.0%, +0.1%, -2.0%, +0.1%, -2.0%, +0.1%,
Which works out at a -3.7% decline every year, but still technically no recession. This is what we refer to in the mathematical business as "absurd".
Unfortunately, this appears to be exactly how the political class across the Eurozone appears to doing. The continent is slowly imploding, but event one 0.1% quarter of growth is taken as proof that "The recession is over". The way the modern world is going, I'm really beginning to understand exactly how the Soviet Union operated on a political level.