Everybody loves a good depression

Last week the New York Times had a chilling piece on the recession. As always, the article talks about the how the recession is the worst since the Great Depression. Let's be honest here, we are in a depression. It's just no one wants to call it that.

Of course, you will hear lots of economists scoff at that and say that it is a joke to compare our current situation to the depression. After all, during the Great Depression:

• Unemployment rose to 25% (it's only about 10% now)
• The stock market fell by 8,000 points (it's still floating above 10,000 points now)
• GDP contracted by over 1/3 (GDP has only fallen a couple percent since 2008)

These are all valid points. But they are also irrelevant.

Less than a month before November's elections, the United States is mired in a grim New Normal that could last for years. That has policy makers, particularly theFederal Reserve, considering a range of ever more extreme measures, as noted in the minutes of its last meeting, released Tuesday. Call it recession or recovery, for tens of millions of Americans, there’s little difference.

The key line is right in that paragraph: "For tens of millions of Americans, there's little difference." For your average American, it does not matter much if GDP contracted 33% or 2%. Their situation is still poor. You can argue that if GDP contracted by the amount it did during the Great Depression then people would undoubtedly be worse off. And that's true too. But comparing the amount of GDP loss is like comparing donkeys and stallions. The economy and the global economic system are completely different today than in the 1920s-30s. It is not reasonable to expect American GDP to shrink in such a way as it did in the past because of how much our economic foundation has changed.

What matters to the average American person is whether or not they can find a source of income and make enough to live off of. If they don't have that it doesn't matter what the statistics are. If you have any doubt that we are in a recession, just keep this in mind:

At the current rate of job creation, the nation would need nine more years to recapture the jobs lost during the recession. And that doesn’t even account for five million or six million jobs needed in that time to keep pace with an expanding population. Even top Obama officials concede the unemployment rate could climb higher still.

Moreover:

• Ford is expected to shut down one-third of its Lincoln dealerships. 
• Microsoft employees will need to start paying for health insurance in 2013.

Whatever party you support, whoever you voted for and will vote for, there is only so much that the government can do to impact your day-to-day living. In some cases what they do may have an overall negative effect on your life... like tax breaks to encourage people to buy something they couldn't have afforded and shouldn't have bought in the first place (that might be good for whatever marketing you bought from, but it isn't good for your personal finances)

If you really want something to change, make a change in your life. Stop relying on the government for everything, even if (perhaps especially if) the government might be responsible for a lot of what's wrong in your life. The government is a strong defender of people's rights, but it is a wasteful allocator of resources. More importantly, even before you can get to the allocation part, you have to go through the overly complicated and overly bureaucratic game that is politics. If you are counting on the government to save your life... well, keep counting.