Why the recession exists.

This is quite a controversial topic as many believe different things.

Some economists define a recession as two consecutive quarters of economic contraction, or a decline in GDP. Unfortunately, the US wasn't off to a bad start this year. According to the Bureau of Economic Analysis, real US GDP rose about 1 percent in the first quarter of 2008 and 2.8 percent in the second quarter, not bad at all.

In my opinion, we are in a recession for several reasons, both long term and shorter term. The government kept interest rates too low for the housing market, causing attraction for home buyers.

Fanny Mae then seperated banks from assuming the risks by buying up the loans which is a good example of government interference into the real estate and housing market. By allowing the banks to sell the loans, they could careless about who they gave mortgages to. Recent wages have gone down significantly with the spike and collapse of oil in the last few months resulting in a much poorer public. Poor people means less goods are purchased and then in turn slows the economy. Recession was delayed by the misuse of credit. Wages have not kept up with inflation.

See recession proof jobs to avoid job loss.