Double dip recession: What are the odds?

Have you been hearing the term “double dip recession” lately? Do you know what it means? It refers to a recession followed by a short-lived recovery that then slides back into a second recession. That said, do you think we are in for one? With a plunging stock market as I write this due to the Gulf oil spill and unemployment at an all time high, it’s not difficult to imagine. In an article on CNN.com, it is explained that a chance for a double dip can be measured by fluctuations in gross domestic product, or GDP, one of the broadest measures of economic activity. They explain that GDP would have to go into negative numbers again for us to fall into a double dip recession. Although growth might not be as high as the GDP growth in 2009, it’s not likely it will turn negative again. David Wyss, chief economist with Standard & Poor’s said the odds have shrunk to a 20% chance. I’ll bet on those odds.

Read the full article here.

Obama: Too Much Debt Could Fuel Double-Dip Recession

According to Reuters, President Obama warned the country about the need to stop rising federal deficits yesterday. He asserted that if government debts continue to pile up, that it could result in a “double-dip” recession.

With the U.S. unemployment rate at 10.2 percent, Obama told FOX News his administration faces a delicate balance of trying to boost the economy and spur job creation while putting the economy on a path toward long-term deficit reduction.

His administration was considering ways to accelerate economic growth, with tax measures among the options to give companies incentives to hire, Obama said in the interview with FOX conducted in Beijing during his nine-day trip to Asia.

"It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession," he said.