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Minneapolis Fed: Recession "Not So Bad"

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It's not a catastrophe - yet.

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The current recession isn't the end of the world, but that won't stop the usual suspects from proclaiming Armageddon.

The Federal Reserve Bank of Minneapolis puts the current downturn in historical perspective by comparing it with the 10 recessions that have occurred since 1946.

So far, the dip in employment is close to the median and the change in output -- gross domestic product adjusted for inflation -- is comparatively mild.

For employment, the recessions of 1948, 1953, 1957, 1960 and 1981 were more severe.

Recessions since World War II have ranged in length from 6 to 16 months and have averaged about 10 months. The current recession has surpassed the postwar average, but its duration won't be known until the economy rebounds, allowing economists to mark its end.

Reviewing prior recessions offers no insight into how long or how severe the current downturn will be, but history reminds us: The current mess isn't a catastrophe - at least so far.

The economy has rebounded in the past without great wails and gnashing of teeth from politicians pitching a point-of-view. The stimulus package kicking around Congress looks more like pork-barrel politics dressed up as a call for change we can believe in.

Here's betting President Obama will face greater resistance over his spending plan from Congressional Democrats than Republicans. Members of his own party will call for more spending on all their pet projects and the Republicans will remain mute, semi-conscious and willing to sign off on just about anything.

Can Congress spend our way out of a recession? Doubtful.
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