Economic outlook and future trajectory

Economics of the 2009 Recession - Where will the Economy Go?

Being in the midst of a recession is not something new to those living in the United States. Recessions have been happening in the country for as far back as the 1700's. A recession is defined as a significant decline in economic activity over a sustained period of time. Unfortunately this is where we find the state of our economy today. How long it will last, no one knows for sure, but if we look back at history we may be able to form an educated guess.

Recessions are considered part of the natural cycle of the modern economic system. They can be attributed to the cycle of imbalanced inflation, money supply, and interest rates that normally keep things in balance and running smoothly (History of U.S. Economic Recession, n.d.). The economy in the United States reminds me of the old saying "What goes up must come down." It seems throughout history every time there was an economic boom it wasn't long before the bottom would fall out and we would find ourselves in a recession. And just as American's are known to do they have always managed to pick themselves up and come back stronger than ever.

It has been said that the key to getting ourselves out of the current recession is to spend money. In order for this to happen there must be a lot of industrial production happening. If you look at the history of industrial production, when ever there has been a drop, consumers have stopped spending and a recession has taken place. During the oil crisis from 1973-1975, the industrial production rate fell to about 74%. In 1983 the industrial production rate fell to 71% sparking the recession of the 1980's. Again in 2001, the industrial production rate fell to 74% after September 11th, causing the recession of the 1990's. Today the industrial production rate has fallen to about 73% leading to the current recession (History of U.S. Economic Recession, n.d.). If history holds true the industrial production rate will go back up and consumers will once again spend money and the recession will fade from our memory until the next one comes along.