Great Recession Substantially Worse Than Previously Thought: Report

WASHINGTON — The 2007-2009 recession, already in the record books as the worst in the 66 years since the end of World War II, was even worse than previously thought.

From the start of the recession at the end of 2007 to the end in June of 2009, the U.S. economy shrank 5.1 percent. That is 1 percentage point worse than the previous estimate that the recession reduced total output during that period by 4.1 percent.

The new estimates emerged from the annual revision of economic data prepared by the Commerce Department's Bureau of Economic Analysis and released Friday.

Among the previous 10 postwar recessions, output in only two dropped by more 3 percent. In the 1957-58 recession, the economy contracted 3.7 percent. And during the 1973-1975 downturn, the economy fell 3.2 percent from the start of the recession to the end.

The government attributed the bigger declines in output in part to weaker consumer spending and business investment than previously estimated.

By year, the government's new figures show that the economy took a much bigger hit in 2009, when output shrank 3.5 percent. The previous estimate had shown a decline of 2.5 percent that year.

In 2008, the new estimate shows the economy contracted by 0.3 percent. The previous estimate had indicated that output was unchanged for that year compared with 2007.

The last recession began in December 2007 and lasted until June 2009. Though the economy has been growing since then, growth has been subpar. And the unemployment rate has remained elevated; it's now 9.2 percent.

The revisions showed that growth in 2010 was a bit stronger than previously estimated. They put growth for all of 2010 at 3 percent, up from a previous estimate that the economy grew 2.9 percent last year.

The revisions to the country's gross domestic product, the total output of goods and services, used more complete data for such items as consumer and business spending.

The government's annual revisions are released each July, along with its first estimate of growth for the April-June quarter of the current year.

Comments

[Jen Celli]

04:16 PM on 08/01/2011

Amazingly, there are several million Americans that could probably give you a revised estimation as to how severe the Great Recession is and how long it's been running. It's just as likely they'd be closer to the truth than the number crunchers that spin out their hyperbole in hopes that someone will buy their snake oil. I'll go get my waders and be back to see how deep the muck is I will have to tromp through to get to the real numbers.

[Tarpon22]

11:01 AM on 08/01/2011

Let me clear something up the media resuses to report.

First was the Rescession then the media reported there is a Second rescession.
Even though anyone could look at peoples comment sALL over the Internet screaming we never left the first Recession.
Now the Media is claiming , OMG it's a double dip Recession.

Sorry Media we never ever left the first one and infact the Country has never gotten back to normal numbers since 2001. Nor has the job market come back since 2001.

Sorry, People are no longer buying it.
Entertainment News

[General Washington]

02:44 AM on 08/01/2011

I'm so glad the Health Insurance Coverage No One Will Be Able to Afford But Will Be Forced to Have, and the We're Calling It Wall Street Reform But We Lied Acts' were passed.

Could you imagine what things might be like if someone (anyone!) in Washington actually focused on spurring demand for productive domestic economic activity?

[knewsreply]

05:35 PM on 07/31/2011

Congratualions Congress you earned this title for the future history books.

[DixieMelody]

04:13 PM on 07/31/2011

Those who are unemployed have the most difficult, frustratin­g, demoralizi­ng, stressful JOB imaginable­:

Searching for a job (knowing there are none to be had).

So they are not jobless.

[AmosKnows]

12:41 PM on 07/31/2011

As long as big business and big banking control the government and polices their interests will thwart the interests of everyone else.

[BuckCarson]

09:58 AM on 07/31/2011

What does one expect? Government is simply is too big for our economy.

BTW - there's still jobs left at the IRS.

[OldTulsan]

01:07 PM on 07/31/2011

There are ?...

http://www.huffingtonpost.com/2011/04/11/irs-funding-cuts-congress_n_847741.html
IRS Funding Cut Days Before Report Shows $330 Billion In Uncollected Taxes

"WASHINGTON -- As part of the budget deal hashed out on Friday evening, lawmakers agreed that no additional federal funds would be used to hire new IRS agents.

Then on Monday, the Government Accountability Office publicly released a study showing that, as of the end of fiscal year 2010, roughly $330 billion in federal taxes had never been paid -- an amount that, if collected, would represent nearly nine times the amount of savings as the budget itself.

The dual developments aren’t shocking. Despite evidence that a single dollar spent on enforcing the tax code could result in up to ten dollars in revenue, politicians, naturally, are reluctant to align themselves with tax collectors. And yet, the sacrificing of funds for IRS agents in the continuing resolution deal underscores a particular problem that seems bound to confront fiscally conscious lawmakers..."

[wgdisk]

06:05 PM on 07/30/2011

The only reason that this great recession is not the great depression II is the fact that FDR put in place a few safety nets (which the insane republicans want to destroy) to help the victims of republican, wall street, corporate america and banking greed. The only reason the stimulus did not work as well as planned is because governors of states put the money into the state coffers and used the funds to balance their state budgets and then they crowed about how well they were doing. A good example is Palenty. The republicans have been obstructionists in every aspect of governing since they came to office. The republican house has passed 12 pieces of legislation since getting into office and none of them have been about jobs or the economey. Compare this to over 500 pieces of legislation for Nancy Pelosi. The republicans have only been interested in union busting, overturning Roe vs. Wade, and obstructing government so Obama will fail. They are un-american at the least and domestic terriorists on the other end. They have repeated their own lies so often that they believe them. They are filled with hate and don't realize that the truely wealthy are playing them all for fools.

[mochaview]

12:19 AM on 07/31/2011

Extend the unemployment insurance for the 99ers.

[LeftCoastEng]

04:36 PM on 07/30/2011

The economy will never fully rebound until we do something about our failed trade policies.

[AZreb]

09:14 AM on 07/31/2011

And now there are more "free" trade agreements pending.

[copperkettle3]

03:33 PM on 07/30/2011

We are in a bailed out depression, not a recession. The economy is artificially propped up by spending to keep business functioning by sending money into the system. This is no different than what Reagan or Bush did which was basically Keynesian economics by expanding the money supply. The available money drove the economy. It doesn't matter how the money is enters the system as long as it continues to travel and does not stagnate. But the GOP continue to try to handicap Democrats when they hold the presidency since they, all of a sudden, want to balance the budget and reduce the supply of money. They did this with Clinton but we began the internet economy then and innovation stimulated business. Bush was expecting stimulus from borrowing and war profiteering which had some effect. Now they want to contract the money supply again, which will slow an already fragile economy and place us into a deflationary period, and probably another recession. Was this planned by the GOP. Possibly. They've had their "starve the beast" philosophy for decades now. It's nearly at its conclusion. More debt may result in a decreased bond rating and increased interest rates which will slow the economy. On the other hand, decreased spending contracts the money supply, causes more unemployment, increases our deficit, and slows the economy. We'll have less spending for unemployment insurance, and then the attempt at privatization of Social Security and Medicare will occur. The corporate aristocracy plan will then be complete.

[wstrvlr]

02:29 PM on 07/30/2011

We are in a DEPRESSION; not a Recession. The primary cause has been the decades of over-spending. The fix? Painful cuts in all budgets, elemination of thousands of unneccessary federal & state government jobs.

Those left will actually have to do their job versus having assistants do the actual job. Roll back wages for ALL state or federal jobs, military included. No one make over $50,000 a year. From the president to a secretary or janitor, should any actually get that much.

As for the talk that DC is expensive to live in. Furnish plain housing for elected officials just like the rest of us live in. No frills for them either. Add an amendment that if any elected official will not do as their electors demand they do then they may be fired. Also, no retirement for being a politician. 1-2 terms & that is all that will be allowed for them. No special insurance benefits. They have to have the type just like the rest of us have only been able to afford for ourselves & or our families. No special perks for any of them.

Cut out ALL subsidies to other countries, bring back ALL military troops so they can patrol OUR borders. Get out of ALL Muslim lands. We do NOT belong there. Amend the Constitution to require a balanced budget. Get on the Change Train or prepare to get flushed down the drain folks.

[Stefan Bast]

08:45 PM on 07/31/2011

Painful cuts. Just like Herbert Hoover fixed the great Depression!

[General Washington]

02:59 AM on 08/01/2011

The problem with parts of your suggestions are the facts as they are now.

If you pay Congresspersons a maximum wage (which they already have), limit their terms, and remove their retirement benefits - there's nothing to prevent them from taking jobs as de-facto lobbyists to influence the next set of morons who occupy their seats.

Which is, of course, what they do now. What you suggest will just make it much, much worse.

Expecting your representatives - who from top to bottom are asked to serve the over 300 million people in this country - to do a good job for several orders of magnitude less than their equivalents in the private sector is (to put it kindly) somewhat foolish.

[wstrvlr]

04:31 PM on 08/01/2011

That's another thing wrong with this country: Lobbyist. They should be outlawed plain & simple. A Congress person is supposed to be serving folks like you & I, not corporations. It has become a prestiege position versus working for the common folks like most are. Instead, too many politicians are swayed by the money they accept from big business. That is a corruption of what they are in DC for.

I do not see that what I suggest would make anything worse, just correct what has been wrong with DC for over 100-150 years: Corruption, greed, lies & deceit.

A politician is in politics for the wrong reason if they are concerned about money. They are up there to be serving & directing votes as the ones who elected them to that office tells them to vote.

Anyone who considers politics for any reason other than serving the people is in it for the wrong reason. Many say it's expensive to live in DC. I suggest dormintory housing for those serving in DC. Then they wouldn't have to stay in their offices like some have been known to do.

If they feel the need to bring their family perhaps 3 brm/ 2 ba homes could be built on a compound just for those folks. If they feel they are too good for a simple FHA type home then they aren't the people we need serving those of us who elected them. Humility is a vertue many folks need an ample

[DMC9]

01:05 PM on 07/30/2011

What a totally different outcome there could have been had the war against Iraq not been started by the Bush government.

[Jen Celli]

04:43 PM on 08/01/2011

A very fine and very overlooked point. #2

[ModerateOhioDemocrat]

01:02 PM on 07/30/2011

Right now we have hundreds of thousands of soldiers overseas in Germany, Korea, Iraq, etc. Places where they are not needed. While there they spend their money on Korean trinkets and food. Why not bring them home and quarter them in the states.

That wins four ways.

We quit paying the markup on overseas danger pay saving the taxpayer money.
We quit losing soldiers unnecessarily.
Those soldiers start spending their income in the USA, stimulating consumer demand here.
We quit being the target of every crackpot tin horned dictator or wannabe dictator around the world.
We don't need to spend as much on bombs. Worried that will decrease the economy? Then ask Raytheon and Lockheed and Boeing and GE to build high tech power plants, weather satellites, a more robust space program, high speed trains, more efficient planes, new airports, better car motors with the corporate warfare money instead.

See, it isn't that hard.

[General Washington]

02:38 AM on 08/01/2011

You know, the suggestion that we pay some of our citizens to just sit around and collect a paycheck for doing nothing, doesn't quite track with other comments you've made.

Otherwise, you are on the right track...

[table lamp]

01:02 PM on 07/30/2011

doomdoom doom

DOOM !!!

[bccmeteorites]

12:10 PM on 07/30/2011

The government attributed the bigger declines in output in part to weaker consumer spending and business investment than previously estimated.

I attribute the great recession to massive doses of unrestrained greed fraud and racism in the market place manipulated by a fraudulent administration.

[ModerateOhioDemocrat]

12:46 PM on 07/30/2011

Racism? Do your really need to inject race into the housing crisis? Seriously?

[mochaview]

12:12 AM on 07/31/2011

Guess who gets hit the hardest? Sure everyone takes a hit but guess who got it the worst.