A recession is two consecutive quarters of gross domestic product (GDP) shrinkage. A depression is GDP shrinkage of 10%. President Obama's ongoing stimulus package and Ben Bernanke's management of the Federal Reserve have apparently reversed the former and averted the latter... if you believe statistics. The Bureau of Economic Analysis says our GDP grew 5.7% in Q4 2009.
That growth may yet be revised down—BEA's latest report revises their Q3 2009 figure down from 4.2% to 2.2%. But remember: a year ago, we were in economic free fall, suffering contractions of –5.4% in Q4 2008 and –6.4% in Q1 2009. In one year, we reverse the trend and post the highest quarterly growth in six years.
The Bush II economy beat that growth rate once, growing at 6.9% as we went to war in Iraq in Q1 2003.
This is why the market-rattling Bernanke-bashing fizzled: even Tennessee Republican Senator Bob Corker acknowledges that the Fed chairman has prevented a worse economic collapse. This is also why we need to learn that the federal budget is not like a family budget: as Robert Reich explains, when the economy goes down, it's government's job to fill the gap and boost the economy, as it appears to have done in Q4 2009.
Update 20:03 CST: But when it comes to jobs, we're still up a creek... maybe through 2015.
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