Recession

A recession is when GDP growth slows, businesses stop expanding, employment falls, unemployment rises, and housing prices decline. For those reasons, many experts say the U.S. is actually in a recession now:
· GDP is slowing,
· Businesses are expanding more slowly,
· Employment is falling,
· Housing prices are down 10%
As USA faces a visible recession in current times, it is evident that economists are in overdrive to review the fiscal statistics and give expert opinions. The stock markets have already created a panic situation in the country. The biggest lenders are now facing a cash crunch and for the first time they are also admitting it. Most of the credit has gone into housing, car, security and insurance schemes. Americans who have invested in such schemes have only their stocks to offer as collaterals and now are facing the brunt with embarrassing foreclosures. Does this recessive situation warrant a soul search amongst the other nations who are depending and banking their economies on Uncle Sam’s federal reserves? The answer is yes. There has been no sustainable development in major sectors like housing, medical, small scale business. The US economy has reached its peak and is slowly going downhill. Jobs are being outsourced to other countries while Americans are themselves jobless. As Asian countries are getting more employment, even expatriates are returning home. India and China are major outsourcing backyards for the US. Cheap goods manufactured in China, Thailand and other poor countries have hitherto relied on the dollar power for sustenance. As the value of the dollar falls, the American dream is going bust for many. Whether it is the shoe maker or the food chain or cola giants or even real estate developers, the earning potential has been cut.

Causes of recessions
Currency crises
Inflation
National debt
Speculation and economic bubbles
War
Excessive interest rates
Underconsumption
Overproduction
Effects of recessions
Bankruptcies
Banks lending less money
Deflation (or disinflation)
Foreclosures
Reduced sales
Stock market crash
Unemployment