People usually think recessions are bad. Are they in fact necessary? Akin to naturally occurring small forest fires…those are good otherwise there could be a mega fire.
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The modern economic order has only really existed since the 1940s or so, and much of the reforms that followed the Great Depression and World War II were only slowly put in place until the 1970s, so there’s no a lot of evidence to really be entirely sure if growth/recession cycles are actually necessary.
What we do know for sure, though, is that modern economies, recessions and all, are still incredibly better for the average normal person than the previous economic order. Even the very worst economic swings of the past 70 years have been just a drop in the bucket compared to the absolutely country-wrecking effects of the Great Depression or any number of other previous economic crises across Europe.
To adapt a quote about democracy: “Everyone knows it’s the worst economic system, except for all those other economic systems that have been tried from time to time.”
What happens is that when business is going well, people bet everything on expansion. As much as possible, as fast as possible, at major costs to efficiencies. Dead weight piles up until boom turns to bust. Then you have a contraction phase where everyone tries to survive and shed inefficiencies in the process.
Recession is a direct result of preceding boom times. To not have recessions, you also need to not have rapid growth phases. It is possible in a generally stagnant economy, but it’s not exactly better that way.
There are upsides to recessions – inefficient businesses go under, allowing new ones to take their place…
…but that often comes with mass unemployment, increased government borrowing, bad debts causing banks to become insecure, etc. It would probably be better to not have recessions…
…but creating an economy that will *never* have recessions might be undesirable (because it implies a system where nothing ever changes and no-one is ever allowed to take a risk), or simply impossible.
What happens is that when business is going well, people bet everything on expansion. As much as possible, as fast as possible, at major costs to efficiencies. Dead weight piles up until boom turns to bust. Then you have a contraction phase where everyone tries to survive and shed inefficiencies in the process.
Recession is a direct result of preceding boom times. To not have recessions, you also need to not have rapid growth phases. It is possible in a generally stagnant economy, but it’s not exactly better that way.
What happens is that when business is going well, people bet everything on expansion. As much as possible, as fast as possible, at major costs to efficiencies. Dead weight piles up until boom turns to bust. Then you have a contraction phase where everyone tries to survive and shed inefficiencies in the process.
Recession is a direct result of preceding boom times. To not have recessions, you also need to not have rapid growth phases. It is possible in a generally stagnant economy, but it’s not exactly better that way.
There are upsides to recessions – inefficient businesses go under, allowing new ones to take their place…
…but that often comes with mass unemployment, increased government borrowing, bad debts causing banks to become insecure, etc. It would probably be better to not have recessions…
…but creating an economy that will *never* have recessions might be undesirable (because it implies a system where nothing ever changes and no-one is ever allowed to take a risk), or simply impossible.
There are upsides to recessions – inefficient businesses go under, allowing new ones to take their place…
…but that often comes with mass unemployment, increased government borrowing, bad debts causing banks to become insecure, etc. It would probably be better to not have recessions…
…but creating an economy that will *never* have recessions might be undesirable (because it implies a system where nothing ever changes and no-one is ever allowed to take a risk), or simply impossible.
First off, this isn’t even a question. It’s just you making a really dumb analogy that in order to even discuss would require us to make horribly incorrect assumptions about the economy.
Recessions aren’t necessary. Depressions aren’t inevitable. The economy isn’t a forest.
Many of the big forest fires in modern history have been naturally occurrences. The increasing frequency is in fact connected to climate change which is in fact real and not a sign that the forest needs pruning. The forest is not an economy.
You didn’t even ask a question so there’s not really much else to say. You gave your opinion. Then you limited the discussion with a completely irrelevant analogy that was itself inaccurate in the first place. Nowhere in there was a question waiting to be answered.
First off, this isn’t even a question. It’s just you making a really dumb analogy that in order to even discuss would require us to make horribly incorrect assumptions about the economy.
Recessions aren’t necessary. Depressions aren’t inevitable. The economy isn’t a forest.
Many of the big forest fires in modern history have been naturally occurrences. The increasing frequency is in fact connected to climate change which is in fact real and not a sign that the forest needs pruning. The forest is not an economy.
You didn’t even ask a question so there’s not really much else to say. You gave your opinion. Then you limited the discussion with a completely irrelevant analogy that was itself inaccurate in the first place. Nowhere in there was a question waiting to be answered.
First off, this isn’t even a question. It’s just you making a really dumb analogy that in order to even discuss would require us to make horribly incorrect assumptions about the economy.
Recessions aren’t necessary. Depressions aren’t inevitable. The economy isn’t a forest.
Many of the big forest fires in modern history have been naturally occurrences. The increasing frequency is in fact connected to climate change which is in fact real and not a sign that the forest needs pruning. The forest is not an economy.
You didn’t even ask a question so there’s not really much else to say. You gave your opinion. Then you limited the discussion with a completely irrelevant analogy that was itself inaccurate in the first place. Nowhere in there was a question waiting to be answered.
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