Comments on: The business cycle rears its ugly head!

By: jenniferchoi

jenniferchoi — Wed, 13 Feb 2008 21:58:11 +0000

1. It seems like the US economy just stepped into recession phase.
2. The “housing bust” seems like the main reason for the slowdown. This is becuase people are investing in housing market, but that is not counted in GDP.
3. Government needs to encourage the people to spend more money by focusing on the fiscal policy. The government also should cut down the taxes to encourage spending.
4. Decreasing the interest rates, so that consumers will be encourage to spend more.

By: serenatu

serenatu — Wed, 13 Feb 2008 07:55:07 +0000

1. I think the U.S. economy appears to be in the recession part on the business cycle.
2. I guess the housing market is the biggest component that’s causing the slowdown in growth. As more people used their houses as loans, and when they are unable to pay back the loans. They lost their houses.
3. Fiscal policy the main component the U.S. government should be focusing on now, in order to turn around the situation.
4. The Federal Reserve should decrease the interest rates in order to allow more money flow; it will help the consumer to get more money, and therefore gives them incentive to spend more.

By: Kristie Chung

Kristie Chung — Wed, 13 Feb 2008 01:02:18 +0000

1.) The U.S. economy is currently receding.
2.) According to the article, the “housing bust” is the main reason for the slowdown in growth.
3.) The government is going to cut down on taxes and increase government spending in order to try to increase consumer spending, and in doing so, stimulating the economy.
4.)By decreasing interest rates, the Federal Reserve can encourage consumer spending.

By: Nicole Wong

Nicole Wong — Tue, 12 Feb 2008 12:47:07 +0000

The US economy appears to be around the peak area of the business cycle, but is nearing a recession. The slowdown in growth is contributed to the “housing bust” and decrease in investment in houses due to their decreasing values. The government could try to avoid a recession by encouraging citizens to spend more. This could be accomplished by the lowering of taxes. The Federal Reserve, on the other hand, could lower interest rates in order to encourage citizens to invest.

By: Jeff Ye

Jeff Ye — Tue, 12 Feb 2008 09:43:24 +0000

The U.S. economy is currently in recession, the part on the graph where there’s a negative slope. This is due to a “housing bust” because fewer and fewer people are buying and investing in houses and real estate. If the government were to lower taxes, this would result in an increase in consumer spending. Likewise, if the federal reserve decreased interest rates, more consumers would be willing to take chances and invest again.

By: kevinma

kevinma — Tue, 12 Feb 2008 09:30:49 +0000

1. I think the US economy is in recession on the business cycle graph.

2 The “housing bust” is the the component that contributed to the slowdown in growth. When America reached its peak, all the americans started to spend a lot of money using their houses as loans. When they couldn’t pay back the loan they lost their houses.

3 The government should encourage the people to spend more money to boost the economy. They can
cut tax which would encourage more spending. They should also focus more on fiscal policy.

4 They should decrease the interest rates. This would give the consumers more money and may encourage them to spend more.

By: Margaret Liu

Margaret Liu — Tue, 12 Feb 2008 07:09:38 +0000

1. In recession; people are spending less, economy is not doing as well.
2. People spending less because of the “housing bust”. Personally, I’ve been waiting forever for housing to get cheaper. I’m surprised the economic decline was not at least SLIGHTLY offset by people buying these cheap houses….maybe apartment dwellers buying nice, fancy houses? Or else this might come later on, and will reveal a new era of expansion.
3. During the summer, New York City creates June as its most popular shopping month by eliminating all taxes on materialistic goods like clothes and electronics. The timing and strategy of encouraging increased spending was phenomenal as I witnessed friends and city hipsters dropped 2 grand a week. Stores also took this opportunity to entice us with 50% off sales, which only increased spending EVEN MORE. Bring big luggages to new york this summer ladies and gentlemen.
4. I think cutting taxes will be enough. Too much interference might be bad, maybe test this tax theory out, and if that doesn’t work, decrease interest rates.

By: Claire Moon

Claire Moon — Tue, 12 Feb 2008 07:05:53 +0000

1. It seems the economy is now hitting the starting point of recession

2. The “housing bust” must be the component to slowdown the growth because when the US economy was on the peak, people expecting to gain more profit bought too many houses which now in a recession period, is hardly sold in a low price.

3. The government should focus on fiscal policy, cut tax, spend more money, and ecourage consumer spending.

4. The Federal Reserve should lower the interest rates which encourages consumer spending.

By: Dana Y.

Dana Y. — Tue, 12 Feb 2008 04:35:31 +0000

1. Although it is hard to definitely pinpoint the status of U.S. economy, I believe it is quite clear that U.S. is slipping to a road to recession, regardless. Nowadays, stock markets are plummeting nearly 3% a day, and according to “Newsweek” magazine, “The U.S. Economy Faces the Guillotine.”
2. According to this post, the most signifant contributor to U.S. recession is the “housing bust.” Overinvestment in houses has led to the precarious rising prices of houses as well as too much easy credit, but as citizens became wary of their own demand as well as the current economic situation, their demand dwindled. This contagion has now led to the brink of recession.
3. The U.S. government should focus on fiscal policies by passing an innovative measure (ex: tax cut) that would bring more money into circulation, thus increasing consumer demand, which inevitably will lead to a rise in supply (and employment and a healthy economy).
4. Interest rates should be lowered. This will lead to increased consumer spending.

By: judychen

judychen — Mon, 11 Feb 2008 16:58:29 +0000

1. In optimistic’s opinion, the US economy is still in peak wheresa in pessimistic’s view, it’s already in recession.
2. The slowdown in growth is in housing market. Because when US economy is in peak, most of people bought houses. However, as US economy is approaching recession, most of people sells houses.
3. The US government has to focus on fiscal policy.
4. The Federal Reserve should reduce the interest rate, so people’s wage would increase and increase the consumer spending.

By: TimChu

TimChu — Sun, 10 Feb 2008 09:46:26 +0000

The US economy seems to be approaching the peak of an expansion since rates have been constantly decreasing.
The housing market seems to have contributed a lot to this slowdown. This is because a house is an investment and counts as a changing of ownership. It does not factor into the GDP
The government will try to decrease taxes so people can spend more, thus increasing the GDP
The federal reserve can decrease interest rates to help consumers.

By: Taryn

Taryn — Fri, 08 Feb 2008 12:48:04 +0000

1. As many have stated already, it is not possible just yet to tell if the US is going into a recession or not. Most recessions are discovered when a country is in one, and I personally believe that the US is headed that way. From an economic standpoint, that is not necessarilly a bad thing because an expansion follows a recession; a natural part of the economic cycle.

By: Conrad Liu

Conrad Liu — Fri, 08 Feb 2008 04:24:12 +0000

1. The United States seems to be on the very beginning of a recession. Either that, or it is nearing the end of its peak.
2. The housing market has most contributed to the slowdown in growth. This is because people invest in the housing market, but this isn’t counted into GDP as the houses are merely changing ownership. Finally, as the notion of a recession becomes ever more frightening, these investors sell the houses at low prices–unfortunately, it still only changes ownership, and is thus again not included into GDP.
3. The Federal Service imposed tax rebates in hopes that consumption would increase, as consumers with more money will naturally spend more.
4. As many others have said, decreasing interest rates can help consumers obtain more money, and so will be encouraged to spend more.

By: kxc.024

kxc.024 — Mon, 04 Feb 2008 13:55:39 +0000

Currently, the economy of the United States is going into a recession (they might deny it but it’s quite obvious unless some serious miracle happens) due to the depreciating value of housing. It’s probably going down because people are just renting nowadays, instead of buying houses.

I think the best chance the US government has of turning this recession around is to promote the growth of the service sector.

By: kevinhuang

kevinhuang — Sat, 02 Feb 2008 09:50:55 +0000

1. It would probably be in between the peak and the trough. Although the article says its not a done deal I think 4% change in GDP is most definitely a done deal.
2. The decline would be from the housing market probably because people invested too much in the housing market late last year and now in facing the recession these people are desperately trying to sell their property for exceedingly low prices.
3. One option they have already tried is the tax rebate. Another one they are also trying is by lowering interest rates so there is more money flow which will increase a demand in consumer expenditure which will bring about more jobs. I personally think that the first option is not likely to be sucessful while the second option will take time to take effect.
4. Decreasing interest rates so there is more money flow.