THERE CAN BE ECONOMIC PAIN WITHOUT A RECESSION.

THERE CAN BE ECONOMIC PAIN WITHOUT A RECESSION. There are lots of bad things that can happen to an economy without there being a recession. One of them is to have several quarters in a row with very low positive growth—stagflation can be an example. Today, large scale foreclosures are imposing large scale pain on both debtors and creditors. This article by Steve Chapman quotes Professor Alan Meltzer, whose opinion is always worth consideration. Meltzer takes the position that today’s economic pain comes not from a recession, but from a decline in the American standard of living. We are poorer because the increase in gasoline prices operates as a large tax increase and because a great deal of wealth in the form of real estate has been destroyed.