Getting Over the Recession

by William Gold
http://williamgold.bravehost.com

According to economists, The Great Recession started in 2007 and ended in 2009, but over a year later Americans, not to mention much of the world, are still trying to recover from its profound effects. Interestingly, retail sales for this holiday shopping season appear to be the strongest in three years - that's three years, even before the recent recession - but home prices continue to decline. These are two of the biggest indicators economists use to gauge the state of affairs, and taken together their mixed message seems to faithfully reflect the uncertainty all around.

Companies are actually awash in record profits, but so far are not hiring. Interest rates are incredibly low but credit lines remain tight. Of course, who give out hundreds of dollars right now - or, even, take it on - with all the uncertainty? But it's a vicious cycle, and no one wants to be the first to try to break it.

The actual number of homes sold nationally this past November was just twenty-one thousand, the lowest figure ever for a single month. Yet bargains abound - foreclosure sales, short sales, auction sales vie with all the deep discounts being offered throughout the industry, even in traditionally hot property markets such as the New York-New Jesery-Connecticut Tri-State Area.

It's a singular situation that even professionals such as real estate developer [Isaac Toussie] have not seen before, that despite the offers sales actually decrease!

The situation is much, much worse in cities such as Cleveland, Minneapolis, and even Dallas, darlings of the 1990s.

Ultimately, nothing will change on the real estate front without dramatic improvements where jobs are concerned. Yet with no strong sustained positives in real estate - which account for new purchases of durable goods - what chance will there be for the outlook on jobs?

It's a vicious chicken-or-egg cycle.

That's why many economists have been calling for the government to do more to stimulate the economy. With everyone just standing around waiting for someone to make the first series of moves before they decide on capital purchases or hiring workers, government intervention is necessary in order to encourage everyone to start behaving normally again - other words, the government itself can create a business environment that's conducive to...well, business!

Others believe that tax cuts are what will stimulate the economy, especially tax cuts for the wealthy. But this tactic, now known as Reaganomics, has been tried to disastrous consequences already.

William Gold enjoys frequenting sites where industry experts such as Isaac Toussie gather to discuss trends and developments.

Article submitted Thursday, July 07, 2011 & read 19 times.

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