Europe faces threat of full-fledged depression

[marmar]

FRANKFURT (MarketWatch) — “Depression” isn’t the word usually used to describe the euro-zone economy, but it may become increasingly appropriate as hopes for a recovery give way to fears of an extended and destructive downturn that policy makers seem unable to halt.

“Unemployment is at a record high, credit is going down, banks are failing…what do you call an economy like that?” said Carl Weinberg, chief economist at Valhalla, N.Y.-based High Frequency Economics and an unabashed user of the ”D-word” to describe Europe’s economic situation.

There is no uniformly accepted definition of a depression, but economists generally agree that depressions last two or more years and are accompanied by a big jump in unemployment, falling credit, and a massive slump in economic output.

That’s certainly been the case for parts if not all of Europe. The Greek unemployment rate hit a once unfathomable 27.2% in January. In Spain, 26% of workers are jobless. Across the euro area as a whole, more than 19 million people are out of work while the unemployment rate stands at a record 12%. ....................(more)

The complete piece is at: http://www.marketwatch.com/story/europe-faces-threat-of-full-fledged-depression-2013-04-17

[Wounded Bear]

1. Ah, yes....the fruits of austerity...nt

[NewJeffCT]

2. Proving once again that you can't cut your way to prosperity

Krugman proven right about Keynesian economics.

[Laelth]

3. A recession is an economic event in which the poor and the middle class suffer.

A depression is an economic event in which the rich suffer too (a little, anyway). We've been going through a "recession" here in the United States since late 2008. We haven't come out of it yet. Yes, banks are sound, insurance companies continue to make record profits, bank execs. are making record profits, the stock market is at or near record highs--i.e. America's rich folks are doing better than ever. The poor and the middle class, on the other hand? We're not doing so well.

Frankly, I welcome the advent of a true depression. Once the rich people start to feel some pain, they might actually convince our government to do something about it.

More here: http://laelth.blogspot.com/2011/01/turning-american-ship-of-state.html

-Laelth