Business Cycles,Recessions, and Depression

Due to the cyles of the economy the business cycle is hard to predict. Population and productivity make the economy rise, but the economy endures cycles of expansion and recession. "Business cycles are an unavoidable and largely unpredictable feature of market economies" (2 Ip). Prdeictions of this cycle are primarily made on gut feelings. Both the household and businesses aspect of the economy bet on and make plans based on how much they expect their sales or wages to grow.

Bear and bull markets are imbalances in the economy. A bull market is when prices are rising or are expected to, bear markets are more viloent than a bull market. "Bullish expectations boost investment, stock pricees, and lending, all of which feeed back to the economy" ( 6,7 Ip).  Throughout time the economy crashes it is just the reason why is what changes. For examplle "in the ninteenth-century America, it was often a natural disaster, a crop failure, or a bank panic" (3 Ip). Eventually every business expansion dies. 

A recession can be defined as "two or more consectuive quarters of declining GDP" (4 Ip). The start of a recession begins with a press release. "Thy delcare a recession whn they conclude there has been 'a significant decline in economic activity spread across the economy, lasting more than a few months' " (3 Ip). To investors, the start and the end declaration is useless. The word depression has changed over time to what we now call a recession (4 Ip). 

When the economies normal recuperative mechanisms fail to engage a recession becomes a depression. The aftermath of a depression is when it is usually undrstood. Banks are crippled when investment booms from compaines fail and loans they took out to finance them go bad. Also other countries collapses can lower affect our economy.  For example "Finland's GDP shrank 10 percent between 1989 and 1993 thanks to the collapse of the Soviet Union, a major trading partner, and its banks" (5 Ip). "Financial crises don't always produce depressions, but htey often leead to servere recessions with unusually weak recoveries" (5 Ip).  

In conclusion both consumers and businesses view of the future drive the cycles of the economy (6 Ip).

Once imbalances happen recessions occur. The Federal Reserve is responsible for adding to the production of it. The failure of the natural recuperative process comes from a broken financial system blocks the flow of credit (7 Ip). This is how a recession can become a depression. In a common situation a  recession leads to lower interest rates which then over time release the demand ending the recession (7 Ip). 

$2 trillion underground economy may be recovery's savior

The underground economy is the work the US citizens do under the table. In this line of work no incomes are reported and no taxes are paid. The income this hidden economy brings in is beneficial. Much of the money made goes back into the economy, boosting it. Also positively many of this work is not illegal jobs. This is another factor that plays into businesses especially small being saved by cutting expenses with these workers. This economy can affect businesses from hiring workers in the first place. Negatively these underground workers affect tax payers. Taxes could be lowered if the underground workers were paying taxes. These workers do not get benefits that many jobs do such as heathcare or social security. In conclusion the bad outweighs the good with benefits and negatives. 

Net Neutrality

"The principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites."Many believe net neutrality to be primarily important for the preservation of internet freedoms. A lack of net neutrality would allow network providers to charge consumers more. "Network owners may be able to block competitor Web sites and services, as well as refuse access to those unable to pay." Small businesses and entrepreneurs have been able to thrive due to net neutrality. For big businesses this would make competition between companies. The consumers would choose what service provider has the best websites accessible loading it's data faster. For compaines that are dominant in a certain area would benefit because it would force consumers to pay the extra cost due to lack of variety of providers.   

http://en.m.wikipedia.org/wiki/Net_neutrality#Debate_in_the_United_States

http://www.savetheinternet.com/net-neutrality-what-you-need-know-now