Is personal recession on the rise?
An old joke goes; A recession is when your neighbor loses his job.
A depression is when you lose your job.
Actually not very funny.
What do you think of this saying? Are you having a recession in your home? How are your neighbors doing?
Economists do not agree on the definition of a recession.
About.com cites The Newspaper Definition:a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters.
But this definition ignore variables such as changes in the unemployment rate or consumer confidence. Second, the website says, by using quarterly data this definition makes it difficult to pinpoint when a recession begins or ends. This means that a recession that lasts ten months or less may go undetected.
About.com says that the Business Cycle Dating Committee at the National Bureau of Economic Research (NBER) determines the amount of business activity in the economy by looking at things like employment, industrial production, real income and wholesale-retail sales. They define a recession as the time when business activity has reached its peak and starts to fall until the time when business activity bottoms out. When the business activity starts to rise again it’s called an expansionary period. By this definition, the average recession lasts about a year.
Comments
My personal recession started the second that I looked at my student loan bill.
Posted by: John Jenkins | January 18, 2008 10:39 AM
Ah! How is that, exactly? What kind of degree did you get? Did you expect an immediate pay off?
Posted by: sally duros | January 18, 2008 10:50 AM
I'm in my last quarter of a BFA degree now. I never expected to be able to attend college and I certainly didn't expect an immediate payoff. It's just that you see $40,000 written on a sheet of paper and you think, I owe that? I've never seen more than $1,500 in one place at one time(When you're relying primarily student loans, it's easy to think that you're not paying anything to go to school), So then I start thinking, what are my job prospects looking like? Hmm, a hundred and fifty applications and no reply. Very interesting.
Going to college is like taking out a mortgage: There's an assumption that it's going to pay off later, but nobody knows the future. As adults we're taught to pay off our debts, so when I see a bill in my name I automatically think, "I have to tighten my budget immediately," even if the size of the bill is so big that it wouldn't make a difference how I budgeted. That culture shock is what I consider to be a personal recession.
Posted by: John Jenkins | January 18, 2008 11:20 AM
"There's an assumption that it's going to pay off later, but nobody knows the future."
It's true that nobody knows the future, but know that your degree could very well pay off for you in ways that you can't anticipate at this moment. It might take longer than you like or it might happen tomorrow. Keep plugging away.
I certainly do understand your sticker shock at seeing the student loan, though.
Posted by: sally duros | January 18, 2008 12:19 PM