While economists are busy debating whether the U.S. economy is headed towards recession, some analysts believe recession is already a reality. I’m no economist, but as a bankruptcy attorney in Indiana who talks with tens of consumers each week, I know that many, many individuals and businesses are suffering significant, even unbearable, financial strain. It’s tough out there! The extensive press about the economic downturn means that the kinds of problems I hear about every day in my Indiana offices are spread throughout the nation to a degree that they are making news. That, in turn, means that policy makers will be taking steps to help citizens cope.

To give you a bit of insight into the discussion points, one traditionally-used sign of a recession is two or more quarters when economic activity declines rather than grows. This, by the way, has not happened, because the third quarter of 2007 showed growth at 4.9%, a very healthy rate, although growth in the 4th quarter fell. Some economic commentators noted that a large part of December’s weakness was due to winter storms, rather than to economic processes.

A second measurement that economists use to judge if a recession is here is unemployment rates. Here, too, the news did not have “Recession” written all over it, because the numbers for employment growth are small but still positive. So, most of the economists predicting a 2008 recession, and even those who believe we’re already in one, are talking about a fairly mild recession as opposed to a dramatic downturn. There is much discussion of further interest rate
cuts, tax cuts, and concessions to help homeowners.

As a consumer bankruptcy specialist, I’m grateful for the attention being drawn to the issues of financial survival. If all the discussion and all the press coverage leads to help for ordinary people trying to make a living for themselves and their families, I say, keep the economists talking, the airwaves humming, and the presses rolling!