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Nhien Le Ms. Caruso English 1102 19 February 2012 Historical Inquiry Paper Recession is generally defined as when the GDP (Gross Domestic Product) growth numbers are in the negative for at least two consecutive quarters. Quarters are basically the year divided into four sections and allow for structure and planning for businesses. But a general definition is not good enough to truly define the recession; you must delve far deeper when examining the recession and look at the impact it has on consumers, peoples lives, businesses big or small, the job market, the value of money, etc. A recession has far reaching consequences and effects as seen by our generation that was hit by the recent recession on December 2007.
Comment [t4]: Big or small businesses, Comment [t1]: Reviewed by Hannah Comment [t2]: Needs title Comment [t3]: More background information. Like what caused the recession, stats on GDP and

People tend to spend less when a recession hits, because they are afraid of not being able to earn enough money to support their spending, this results in businesses getting less income and then because of that cutting jobs and causing higher unemployment rates. This is just a basic example of what happens in a recession and its domino effect on a population. Young people are shown to have been affected the most by the recent recession, due in part them having the least experience out of all the age groups which makes it hard to find a job. Think about it, a young college student fresh from graduating has difficulty finding a job and is riddled with debt from loans and bills to pay, plus they are competing with more experienced; from the get go they are set up to fail and are given a shaky and uncertain foundation. They are not given a good platform to start from and this affects their long term financial and economical future and dreams. From
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2007 to 2011, younger workers saw their earnings fall more steeply than workers in older age groups (Dougherty). Businesses werent exempt from the effects of the recession either; small businesses which are generally considered the backbone of the economy was hit the hardest during the most recent recession. Some general reasons are that their brand names could be less established and less trustworthy than the bigger companies, they have less revenue and money to support themselves during a recession and also have less new customer investments. They even have to lay off workers to reduce costs, which hurts them more than bigger businesses obviously, because they have fewer workers and a smaller workforce. But the biggest factor in the struggling of small businesses is in poor sales, because people are unwilling to buy their products as evidenced in the graph of ( ahin). But just because small businesses were as a collective hit harder than bigger businesses does not mean that bigger businesses escaped the downfalls of the recent recession. Ford, GM and Chrysler were probably the biggest story in regards to big businesses that were impacted tremendously by the recent recession. GM and Chrysler in fact declared bankruptcy while Ford managed to survive without becoming bankrupt. Their fall out and struggles caused them to cut back and lay off many people. GM, Ford and Chrysler had to submit business plans to Congress in order to try and receive bailouts; here are the examples of how GM and Chrysler cut back. GM: "Employment [has been] reduced 42% from 167,000 to 97,000 (Cruz). Chrysler: By the end of 2008 [from 2007], Chrysler will have separated over 32,000 employees, including 5,000 white collar employees (Cruz). The impact that the failure of these major car companies was far reaching, Chrysler had to shut down approximately 25% of its dealerships and filed for bankruptcy April 30th, 2009. GMs 2008 total overall losses were at
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30.9 billion dollars, and on June 1st, 2009 filed for bankruptcy. This obviously lost many people their jobs and caused widespread panic that many of the American peoples dollars would now go toward foreign cars. Even big businesses that seemed like they would never fail had failed, where was the security and trust now? If even well established and trusted names like Chrysler and GM had failed what chances did other companies have to survive during the recent recession? The most recent recession of 2007-2009 was the longest of postwar period lasting eighteen months. Even though the recession is over and has been over for almost three years now the effects are still being felt by people that have been hit hard by the recession, recovery is a very general word and some people after being knocked down struggle to find a job still to this very day. People have to resort to government benefits and get as many handouts or free stuff as possible. But even though there are so many negative effects that come with a recession, it does have one positive effect. It helps cure inflation, which is good because inflation raises prices and makes currency lose value. Prices are eventually lowered during a recession because spending is limited and there is not a huge demand for products. People become scared to spend when a recession hits, with good reason, but it hurts the economy when no one is spending; if no one is spending money and putting money into the economy, then businesses are not gaining a profit and cannot in turn pay their employees. It all is a chain effect; everything has to do with everything.
Comment [t14]: Good conclusion Comment [t13]: How does lowering inflation help the economy? Comment [t11]: Source that the recession is over? Comment [t12]: Comma here Comment [t10]: What about all the other big companies that got bailouts? Specifically the banking industry that led to millions of foreclosures.