With Recessions Like These, Who Doesn’t Need Payday Loans?

During a recession, it helps sometimes to know that payday loans are there when you need quick emergency cash before payday.

And speaking of recession…

Did you know that America has been in a recession since December 2007?

The National Bureau of Economic Research (NBER) has proclaimed that the U.S. has been in a recession since then, making official what most Americans have already believed about America’s slumping balance sheet.

NBER is a private group of leading economists who chart economic cycles. That it’s taken this long to determine when the current recession began isn’t surprising, considering that it takes some time to declare when a recession starts because of the final readings that must be analyzed.

What are the causes?

The downturn in the labor market throughout 2008 has been significant. Employers reduced payrolls by 1.2 million jobs – and that is just through October! Some economists predict that November will show a loss of 325,000 more jobs.

Personal income, industrial production, wholesale and retail sales all peaked between November 2007 and June 2008 according to NBER. Since then, there has been a consistent downward slide. Gross domestic product is also considered.

Wait. Isn’t a recession two consecutive quarters of economic activity decline?

No. And NBER did not give any cause for this recession. Yet it doesn’t take too much insider knowledge to see that America’s housing downturn since 2006 is a big culprit. The fall of housing prices from peak levels cut deeply into both further building and purchases.

In turn, this also caused a sharp rise in foreclosures. Then more dominoes fell, including the banking and credit crisis. The situation is not hopeless, but it is bleak.

The current recession is one of the longest downturns since the Great Depression of the 1930’s. The last two (1990-1991 and 2001) lasted eight months each, per NBER.

Focus on what we must accomplish

In a statement, White House Deputy Press Secretary Tony Fratto said that even though the recession is official, it is more important to focus on the steps being taken to fix the economy.

“The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus,” he said. “Addressing these areas will do the most right now to return the economy to growth and job creation.”

How long will it go?

What’s the best case scenario? Some economists say that the economy will hit bottom by second quarter 2009. That would be the longest recession in America since the Great Depression.

Lakshman Achuthan, managing director of Economic Cycle Research Institute, has indicated that time will heal the wounds:

All the hand waving and real cash that policymakers are throwing at the problem won’t change the fact we’re stuck in this nasty recession. The ultimate cure of a recession is letting it run its course. Even with indicators in a tailspin, this still is only a very severe recession. There’s lots of gloom, but we don’t see doom.

We’re going to have to ride this out

Ever hear of a Kondratieff winter? Well, it appears we’re there now. Fed Chief Bernanke is suggesting a write down of part of the principal outstanding credit balance, rather than doing things like reworking mortgage terms or pushing more toward bankruptcy. It will take time, though. And perhaps a new gold standard (see video below).

For those of us in a temporary lurch due to that trip to the emergency room or broken fuel pump in the commuter car, payday loans are available. Doesn’t take long to apply for payday loans, either. Don’t borrow more than you can easily repay and look for budgeting solutions that will help you in the future. Changing habits takes time; ride it out.