[Tipsy]

Originally Posted by Sakuhta

You cannot avoid a recession when your currency is losing value in the global market, and you can't stop your currency from losing value in the global market without strengthening the domestic economy, and our domestic economy can not be strengthened without increasing domestic production and exports,

Cut spending and taxes. The government's deficit spending is the reason why our currency is inflating (because of money just being printed out of thin air) and tax cuts (more specifically, marginal tax cuts) will stimulate the economy. This will both hold inflation down and stimulate the economy meaning the currency will stop losing its value and the domestic economy will be strengthened. (And spending cuts must be much greater than tax cuts.)

Originally Posted by Sakuhta

and we can not compete with foreign prices because the dollar is currently too strong and too expensive.

Or we could allow the market to take its course and continue converting our economy into one that is knowledge based and allow the low-skill labor jobs to be outsourced elsewhere while higher paying, higher skilled jobs become more dominant in the United States. Comparative advantage?

Originally Posted by Sakuhta

Solution? A recession, and a weak dollar. It is inevitable.

It's not inevitable; it's what will happen if the government doesn't fix what it has screwed up.

Originally Posted by Static

And tipsy, I did some research and found out Greenspan did do some messing around in the federal reserve but it seems bernanke is at least making steps to remedy the situation.

Just like the next President is going to have a bit of a mess to clean Bernanke has quite the dilemma on his hands that will take years to come back from. Increasing and decreasing rates on hwhatnot here and there.

The problem is, macroeconomic policy is too blunt of an instrument to be used to fix the economy and manipulating interest rates (like Greenspan did and Bernanke is doing now) and that is going to screw us in the long term. The problem with the subprime loans in the housing market only happened because of this macroeconomic manipulation.

Originally Posted by Static

Now when you say recession... What is the difference of that and depression?

A recession is, by definition, just when the GDP decreases over a period of at least 6 months. That's important because GDP is a measurement (not exact, but a good estimate) of all the final goods and services. A depression is just a very severe recession.