Changes

[[File:Pers-income.jpg|thumb|400px|Personal income; change from previous year]]

[[File:Pers-income.jpg|thumb|400px|Personal income; change from previous year]]

===Money===

===Money===

In terms of a monetary explanation, there is far more money around, due to the stimulus programs of the Federal Reserve, Treasury, and Congress. However the velocity (turnover rate) is down to the lowest rate since 1991.  That is, people and business are saving and not spending.  Banks are not lending. The nation’s banks in March 2009 had reserves of $679 billion, up from only $45 billion in August 2008.  Individuals are keeping their cash in the banks, or paying off credit cards and debts, and not buying new merchandise.  The goal of federal stimulus spending is to get consumer spending going, to create jobs and keep businesses from slowing down.<ref>[[Inflation]] can do this -- force people to deplete cash and savings with a "spend now" mentality and damn the consequences of impoverishing themselves and heirs later. Keynes said, "In the long run we're all dead". Keynes is dead, but those alive in 2008 have to live with the consequences of decades of these economic theories elevated to public policy.</ref> If people do start spending again all the extra money will cause inflation, but in that case the Federal Reserve plans to reduce the money supply and, hopefully, restore normalcy and prosperity.<ref>Mark Gongloff, “Best Check on Inflation: Broken Banks,” ’’Wall Street Journal,’’ Mar. 20, 2009</ref>

In terms of a monetary explanation, there is far more money around, due to the stimulus programs of the Federal Reserve, Treasury, and Congress. However the velocity (turnover rate) is down to the lowest rate since 1991.  That is, people and business are saving and not spending.  Banks are not lending. The nation's banks in March 2009 had reserves of $679 billion, up from only $45 billion in August 2008.  Individuals are keeping their cash in the banks, or paying off credit cards and debts, and not buying new merchandise.  The goal of federal stimulus spending is to get consumer spending going, to create jobs and keep businesses from slowing down.<ref>[[Inflation]] can do this -- force people to deplete cash and savings with a "spend now" mentality and damn the consequences of impoverishing themselves and heirs later. Keynes said, "In the long run we're all dead". Keynes is dead, but those alive in 2008 have to live with the consequences of decades of these economic theories elevated to public policy.</ref> If people do start spending again all the extra money will cause inflation, but in that case the Federal Reserve plans to reduce the money supply and, hopefully, restore normalcy and prosperity.<ref>Mark Gongloff, “Best Check on Inflation: Broken Banks,” ’’Wall Street Journal,’’ Mar. 20, 2009</ref>

[[File:Housing$.jpg|thumb|340px]]

[[File:Housing$.jpg|thumb|340px]]

The longest economic slumps since 1945 were the 16-month downturns that ended in March 1975 and November 1982. The [[Great Depression]] lasted 43 months, from August 1929 to March 1933.  

The longest economic slumps since 1945 were the 16-month downturns that ended in March 1975 and November 1982. The [[Great Depression]] lasted 43 months, from August 1929 to March 1933.  

"This may be referred to as the Great Recession," because of its length, said Norbert Ore, chairman of the Institute for Supply Management’s factory survey. "It looked like we were headed for a shallow recession earlier in the year because of higher energy prices. With the meltdown in the financial sector, it has become something more serious."<ref>see [https://www.bloomberg.com/apps/news?pid=20601109&sid=ar0v6PP3HCpk&refer=home Steve Matthews and Timothy R. Homan, "U.S. May Be in for ‘Great Recession,’" ''Bloomberg News'' Dec 2, 2008]</ref>

"This may be referred to as the Great Recession," because of its length, said Norbert Ore, chairman of the Institute for Supply Management's factory survey. "It looked like we were headed for a shallow recession earlier in the year because of higher energy prices. With the meltdown in the financial sector, it has become something more serious."<ref>see [https://www.bloomberg.com/apps/news?pid=20601109&sid=ar0v6PP3HCpk&refer=home Steve Matthews and Timothy R. Homan, "U.S. May Be in for ‘Great Recession,’" ''Bloomberg News'' Dec 2, 2008]</ref>

[[File:Constr1.jpg|thumb|400px|Construction spending--change from previous year]]

[[File:Constr1.jpg|thumb|400px|Construction spending--change from previous year]]

===Housing===

===Housing===

==Worldwide crisis==

==Worldwide crisis==

The crisis is worse in many other countries, which means they are dragging down the US economy and cannot be expected to be the engine to restore prosperity.  Japan’s economy, the world’s second largest after the U.S., is deteriorating rapidly because of shrinking exports and weak domestic spending. Japan's GDP shrank at an annual rate of 12.7% in the fourth quarter of 2008, and the downward plunge shows no sign of reversal.  

The crisis is worse in many other countries, which means they are dragging down the US economy and cannot be expected to be the engine to restore prosperity.  Japan's economy, the world's second largest after the U.S., is deteriorating rapidly because of shrinking exports and weak domestic spending. Japan's GDP shrank at an annual rate of 12.7% in the fourth quarter of 2008, and the downward plunge shows no sign of reversal.  

Japan's exports to the U.S. and other areas are down sharply, causing massive layoffs at companies like Nissan, Toyota, Panasonic and Sony. Capital spending on tools and factories has fallen as companies halted production lines and cut investment. Consumer spending has stalled as Japanese households reduced spending amid the large-scale layoffs.  The government has promised a huge bailout package on the order of  50 trillion yen ($545 billion), but has been unable to get it passed in parliament.<ref>Hiroku Tabuschi, "Japan’s Economy Plunges at Fastest Pace Since ’74," [https://www.nytimes.com/2009/02/16/business/worldbusiness/16yen.html?ref=business ''New York Times'' Feb. 15, 2009]</ref>

Japan's exports to the U.S. and other areas are down sharply, causing massive layoffs at companies like Nissan, Toyota, Panasonic and Sony. Capital spending on tools and factories has fallen as companies halted production lines and cut investment. Consumer spending has stalled as Japanese households reduced spending amid the large-scale layoffs.  The government has promised a huge bailout package on the order of  50 trillion yen ($545 billion), but has been unable to get it passed in parliament.<ref>Hiroku Tabuschi, "Japan’s Economy Plunges at Fastest Pace Since ’74," [https://www.nytimes.com/2009/02/16/business/worldbusiness/16yen.html?ref=business ''New York Times'' Feb. 15, 2009]</ref>