Trying to Live With a Recession in the World's Largest Economy

Trying to Live With a Recession in the World's Largest Economy
Millions of Americans cut their spending as they worry about keeping their jobs and their homes. Yet spending helps drive the economy. Transcript of radio broadcast:
08 December 2008

VOICE TWO:

And I'm Barbara Klein. This week on our program, we turn our attention to the economy.

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VOICE ONE:


An employee loads a TV for a shopper at Circuit City, a major seller of elec-tronics. It sought bankruptcy protection last month and is closing one-fifth of its stores to reorganize.
A lot of people have thought for months that the United States is in a recession. But the economy is not officially in a recession un-til a private research organization says it is. Guess what? Last Monday the National Bureau of Economic Research announced that the United States has been in a recession for the past year.

Economists on the Business Cycle Dating Committee met by con-ference call on Friday, November twenty-eighth. They decided that economic activity reached a high point in December of two thousand seven. It peaked after eight years of expansion.

The United States was last in a recession from March to Novem-ber of two thousand one. Some economists say the current re-cession could last into two thousand ten. But how long, and how bad, it will be is really anyone's guess.

VOICE TWO:

The United States has the world's largest economy. Japan has the second largest. It, too, is in a recession, officially announced on November seventeenth. That was four days after Germany con-firmed a recession in its economy, the largest in Europe.

One way to measure an economy is by the value of goods and services produced within a country -- its gross domestic product. The latest estimate shows that America's G.D.P. fell by half a per-cent between July and September. It also shrank at the end of last year.

But in between it grew. Recessions are commonly defined as at least six months in a row of decrease in G.D.P. The committee does not use this definition. Instead it uses a number of different reports to identify a recession.


Lower prices for new houses in Springfield, Illinois
The economic crisis began with the collapse of property values, the bursting of the housing bubble in the United States. Invest-ments built on high-risk mortgage loans became "toxic." No one wanted to trust banks that owned them. Credit markets froze. Governments around the world have had to intervene aggres-sively to support their financial systems.

VOICE ONE:

Barack Obama has to wait until January twentieth to become president. But he has already moved faster than most newly elected presidents to name his economic team. He wants to get an early start on an economic recovery plan big enough to con-tain the recession. His goal is to save or create two and a half million jobs by January of two thousand eleven.

He wants Congress to have legislation ready for him to sign into law soon after he takes office.

VOICE TWO:

Last Tuesday President-elect Obama met with the nation's gover-nors in Philadelphia, Pennsylvania. He said he wants their help in designing his economic recovery plan.

State and local governments are collecting less tax money as a result of falling property values, rising unemployment and other problems. Most of the fifty states are required to balance their budgets. Most are now facing deficits. So that means they have to cut services or raise taxes, or both.

Last Monday, Governor Arnold Schwarzenegger declared a "fiscal emergency" in California. He acted under a constitutional amendment passed by state voters in two thousand four. It re-quires California to balance its budget.

The declaration lets the governor call a special meeting of the legislature to pass measures within forty-five days to deal with the budget crisis. He wants a combination of spending cuts and tax increases in the nation's most populous state.

Early estimates show that over the next eighteen months, Cali-fornia's budget deficit could reach twenty-eight billion dollars. That is more than double the current shortfall.

Governor Schwarzenegger warned that without quick action, Cali-fornia could be out of money in February.

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VOICE ONE:


U.S. fuel prices are at their lowest in almost five years
Motorists are happy at the drop in fuel prices. But economically speaking, there is not much else to be happy about.

Stock prices climb one day, then fall the next. Investments and retirement savings have shrunk. The economic downturn has mil-lions of people worried about keeping their jobs and their homes.

Americans have cut back on spending, and not just for things like travel and entertainment, or new cars. Some are limiting medical and dental care to only the services they need most. They may be saving money, but also taking a risk.

VOICE TWO:

One family trying to save money is the Jeffries of Carbondale, Colorado. Sarah Jeffries and her husband, Wayne, have two chil-dren: a son, age five, and a daughter, age two.

Wayne Jeffries is a manager for a construction company. Sarah says other builders in the area are letting workers go because of weak demand. She says her husband's company has projects through the middle of next year. But no one knows what will happen after that.

VOICE ONE:

Fear of losing a job is a big reason why people are looking to save money. Sarah Jeffries says she buys things only when the price has been reduced. She gets all the children’ s clothes from used clothing stores.

She says the family does not eat at restaurants as much as they used to. Sarah also says she looks for money-saving coupons to use at the grocery store because of high food prices. And she makes an extra effort not to waste any food. One or two times a week the Jeffries have what they call “picnic night."

That is, the kids call it picnic night. To the parents, it provides a way to use foods left over from meals earlier in the week. But Sarah serves the leftovers on plates on a blanket on the floor, and says the children love it.

VOICE TWO:

Saving money is also a goal this holiday season at the Jeffries’ house. Sarah says the family used to spend about one thousand five hundred dollars on Christmas gifts and decorations each year. But this year, she says they will spend between seven and eight hundred dollars.

One way they are cutting back is by reducing the number of gifts they buy. Sarah and Wayne generally exchange Christmas gifts with each other and with her parents and brother who live in the area. This year, the adults have all decided not to buy each other gifts. Instead, they are each putting fifty dollars toward a Nin-tendo Wii video-game system that they plan to share.

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VOICE ONE:

Personal spending is a big part of the American economy. It rep-resents about seventy percent of the gross domestic product.

For many businesses, anywhere from twenty-five to forty percent of their sales all year normally come during the winter holiday season.

The shopping season traditionally begins on the day after Thanksgiving. The day is called “Black Friday." The name comes from the tradition of recording profits in black ink and losses in red. Black Friday is when stores hope to return to the black for the year.

VOICE TWO:

Many stores now open before sunrise and offer extra special deals for early shoppers on Black Friday. The National Retail Federation found that almost one-fourth of shoppers this year arrived at stores by five o'clock in the morning.

Black Friday used to be the biggest shopping day of the year. And it still may be the day when the largest number of shoppers visit stores. An estimated seventy-four million people visited stores and Web sites on Black Friday this year. But Black Friday is no longer necessarily the day when shoppers spend the most money.

VOICE ONE:

With the economy down, shoppers are thinking carefully before making holiday purchases and looking for the best values. Black Friday this year was better than expected. But stores were offer-ing big price reductions -- sacrificing profits, and possibly risking their futures.

VOICE TWO:

Americans are better known for spending money than for saving it. But now, some are trying to save by reducing the debt they owe on credit cards. Others are trying to avoid taking on new debt. Still others have had their credit limits reduced as a result of the financial crisis.

The Coinstar company reports that almost one-fourth of Ameri-cans say they are paying for purchases with cash more often than they did a year ago. Using cash, they say, helps them manage their money better and reduce credit card debt.

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VOICE ONE:

Recently we asked some shoppers at the big Potomac Mills Mall, south of Washington, D.C., how the economy is affecting their lives. Erica Scott lives in Culpeper, Virginia:

ERICA SCOTT: "We have our own business. So, we’re feeling it there.Calls are slowing down. So, we’re just trying to cut back wherever we can. We’ve had to let a few employees go. We do a lot of contracts with the Virginia Department of Transportation and they’ve cut back on their contracts, so we’ve had to cut back. We’re eating out less, cutting more coupons out, shopping for cheaper gas, going to outlet malls instead of normal malls ... "

VOICE TWO:

Some shoppers are waiting to see how the economy does under the new administration. Dennis Aanderud of Spotsylvania, Vir-ginia, put it this way:

DENNIS AANDERUD: “My wife would like to get a large-screen TV, and maybe a car. We’re just going to wait and see which way things are going. Things are in a very volatile situation right now and I think people are just waiting to look and see what Presi-dent-elect Obama does.”

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VOICE TWO:

Our program was written by Nancy Steinbach and produced by Caty Weaver. I'm Barbara Klein.

VOICE ONE:

And I'm Steve Ember. Transcripts, MP3s and podcasts of our pro-grams are all available -- free of charge -- at voaspecialeng-lish.com. Join us again next week for THIS IS AMERICA in VOA Special English.


intervene aggressively
intervene
to become involved in an argument, fight, or other difficult situation in order to change what happens
intervene in
▪ The police don't usually like to intervene in disputes between husbands and wives.
▪ The army will have to intervene to prevent further fighting.

aggressively
1 behaving in an angry, threatening way, as if you want to fight or attack someone:
▪ Jim's voice became aggressive.
▪ Teachers apparently expect a certain amount of aggressive behaviour from boys.
2 very determined to succeed or get what you want:
▪ A successful businessman has to be aggressive.
▪ an aggressive marketing campaign


legislation
a law or set of laws:
▪ This is a very important piece of legislation (=law).
legislation on
▪ the legislation on abortion
legislation to do something
▪ new legislation to protect children
introduce/bring in legislation
▪ The government has promised to bring in new legislation to combat this problem.

deficits
the difference between the amount of something that you have and the higher amount that you need ➔ shortfall:
▪ the country's widening budget deficit
▪ the US's foreign trade deficit
trade deficit also trade gap [countable]
PE the amount by which the value of what a country buys from abroad is more than the value of what it sells


fiscal
relating to money, taxes, debts etc that are owned and managed by the gov-ernment:
▪ a fiscal crisis
fiscal policy/measure
▪ sound (=good) fiscal policy
▪ a fiscal matter

constitutional amendment
constitutional
officially allowed or limited by the system of rules of a country or organiza-tion:
▪ Legal experts say that the bill may not be constitutional.
▪ a constitutional right to privacy
▪ We have a constitutional right to keep weapons for self-defense.
▪ a constitutional monarchy (=a country ruled by a king or queen whose power is limited by a constitution)
amendment
[uncountable and countable] a small change, improvement, or addition that is made to a law or document, or the process of doing this:
▪ constitutional amendments
amendment to
▪ Cramer introduced an amendment to the Civil Rights Act.

dental care
relating to your teeth
dental treatment/care
▪ Dental care was free in the 60s.
dental disease/problems/decay etc


gross domestic product( GDP) 國內生產總值

sacrificing
1 [uncountable and countable] when you decide not to have something valu-able, in order to get something that is more important:
▪ The minister stressed the need for economic sacrifice.
▪ The workforce were willing to make sacrifices in order to preserve jobs.
▪ She brought three children up single-handedly, often at great personal sac-rifice.
2RR
a) [uncountable and countable] the act of offering something to a god, espe-cially in the past, by killing an animal or person in a religious ceremony ➔ sac-rificial:
▪ They made sacrifices to ensure a good harvest.
b) [countable] an animal, person, or object offered to a god in sacrifice ➔ sacrificial
sacrifice to
▪ In those days, an animal was offered as a sacrifice to God.
▪ a human sacrifice (=a person killed as a sacrifice)
3 literary the final/supreme/ultimate sacrifice the act of dying while you are fighting for a principle or in order to help other people:
▪ Captain Oates made the ultimate sacrifice in a bid to save his colleagues.

debt
1 [countable] a sum of money that a person or organization owes
debt of
▪ This over-ambitious strategy has saddled them with debts of $3,000,000.
pay (off)/repay/clear/settle etc a debt
▪ He had enough money to pay off his outstanding debts.
▪ Romania is paying more and more to Western banks simply to service the debt (=pay it).
run up/amass debts
▪ students who run up huge debts

cut back

to reduce the amount, size, cost etc of something
cut back on
▪ Several major hospitals are cutting back on staff at the moment.
cut something ↔ back
▪ Education spending cannot be cut back any further.
▪ Richer countries must do more to cut back carbon emissions.
➔ cutback
2 cut something ↔ backDLG to remove the top part of a plant in order to help it to grow:
▪ Cut back the shoots in spring to encourage bushier growth.
3 to eat, drink, or use less of something, especially in order to improve your health
cut back on
▪ Try to cut back on foods containing wheat and dairy products .
volatile
1 a volatile situation is likely to change suddenly and without warning oppo-site stable:
▪ an increasingly volatile political situation
▪ the highly volatile stock and bond markets
2 someone who is volatile can suddenly become angry or violent
3HC technical a volatile liquid or substance changes easily into a gas opposite stable