The only thing to fear… is the culture of fear itself.
President Obama has been telling everyone of the impending catastrophe awaiting our country should we choose to ignore his wisdom, and not place our faith in the trillion dollar bailout he is selling.
Of course, when told that this is the worst economic crisis since the Great Depression, one should check to see by what measure this statement is (or is not) valid. Based on the press conference by the Spender-in-Chief, one would think the unemployment rate is, well, off the charts. But a quick check of the Internet shows differently.
Current Unemployment Rate: 7.6% and the highest unemployment rate: 25% in 1933. How about all those other times when the rate climbed above 7%.
- Six months of 1958 – max 7.4%
- Three months of 1961 – max 7.1%
- All of 1975 – max 9.0%
- All of 1976 – max 7.9%
- Seven months of 1977 - max 7.6%
- Eight months of 1980 – max 7.8%
- All of 1981 – max 8.5%
- All of 1982 - max 10.8%
- All of 1983 – max 10.4
- All of 1984 – max 8.0%
- All of 1985 – max 7.3%
- Eight months of 1986 – max 7.2%
- All of 1992 – max 7.6%
- Six months of 1993 – max 7.2%
- One month of 2008 – max 7.2%
- One month of 2009 – max 7.6%
How about a broader picture (from U.S News and World Reports):
- August 1929-March 1933
- Length of recession (months): 43
- Peak unemployment rate during recession: 31.7%
- Decline in GDP: 46%
- Stock market decline: 87%
- November 1973-March 1975
- Length of recession (months): 16
- Peak unemployment rate during recession: 9%
- Decline in GDP: 3%
- Stock market decline: 29%
- July 1981-November 1982
- Length of recession (months): 16
- Peak unemployment rate during recession: 9.7%
- Decline in GDP: 2.9%
- Stock market decline: 20%
- July 1990-March 1991
- Length of recession (months): 8
- Peak unemployment rate during recession: 6.8%
- Decline in GDP: 1.5%
- Stock market decline: 16%
The data on the current recession has still yet to be totaled. The unemployment rate is high, but not off the charts. The decline in
GDP is on par with other recessions, and there are actually signs and predictions that the end is in sight (see The Good News Economist).
Granted, there is no consensus on the recovery, or even the severity of the recession. But where is the justification for tripling the federal deficit?
