There's is some government spending that has to be done anyway, but can be shifted in time so it's done when there's a recession.
Things like bridge rebuilding or warships.
Of course, if you're in recession for 8 years, you start running out of such things.
Why is pushing everyone into recession not a good way of doing it? Recessions are healthy for the economy. We need double digit interest rates for ~5-10 years to clean up the past mismanagement. The longer we delay this, the more painful it will be, peaking at massive civil unrest.
Part of me wonders if we are talking ourselves into a recession, the market is definitely spooked about how China's growth slowdown affects the global economy but in terms of wages and unemployment the US economy still has a long ways to go. For instance African American unemployment is at record lows but still around 6%. Many people are working gig economy jobs and part time and would love a full time opportunity. Growth (discounting tax cuts) is low but stable, so is wages.. so is inflation.
If anything is going to trigger a recession I would put my money on corporate debt, so many companies are loaded with debt that will rear it's ugly head the moment any slowdown in growth is on the horizon. That will trigger lower spending, job cuts, and other means that would bring us into recession.
Except a stock market crash and a recession are two different things. Beyond temporary contraction in demand, and supply line disruption in China, the US still has solid fundamentals and I see no reason why things wouldn't just pick up again in a few months. Do you have reason to believe otherwise?
I was speaking to the strategies that could be employed vs what we’re actually doing, and I am concerned that what we’re doing will cause a recession.
To relate the strategy to that formal definition of a recession, if everybody stayed home for a month this quarter, we might lose 1/3 of the quarter’s GDP. But if that break is structured so that it’s expected and we resume normal activity afterward, then in the next quarter we would see the GDP “grow“ a ton, if only back to normal because people are working and spending for the full three months, and we would cleanly avoid this formal definition for a recession.
Also, if you have data supporting your hypothesis, I would be very interested to see it.
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