Economic Outlook: When Will the Recession End?

Learn more about the recession that gripped America in the early 1980s, including criticism of Reaganomics and quotes from various economic publications.

| May/June 1982

  • Money
    Thoughts were pretty grim about the state of the economy in 1982.

  • Money
Well, it hasn't really taken very long at all. Here we are not halfway into 1982, and even the Pollyannas who — in the closing months of 1981 — were telling us that (if we were willing to cinch up our belts just one more notch) everything would soon be all right are beginning to tune their throats for shouts of panic.
Indeed the signs that we could be in for times that are a good bit harder than any the last 12 years of inflation have produced are everywhere you look. Consider, if you will, the following excerpted quotations . . . both from "established" business publications and from exclusive financial newsletters (many of which gave early warnings of the troubles we're facing today).

The Wall Street Journal, March 8, 1982 (from "The Outlook"): The economic situation continues to deteriorate on almost a weekly basis, Evans Economics, a Washington-based consulting firm, says in its latest survey.

R.E. McMaster, Jr., The Reaper: Some 14 states owe the federal government $6.7 billion that was borrowed for unemployment compensation. These large states, including Pennsylvania, Michigan and Illinois, are requesting that Congress "suspend payment requirements." In other words, some $6.7 billion in loans from the federal government to the states is about to be forgiven or eaten by us, the taxpayers.

C.V. Myers, Myers' Finance and Energy: Review the record! In 1960 government used one-fifth of the total savings, leaving four-fifth for business and other purposes. In 1981, government used four-fifth of the total savings, leaving only one-fifth for business and other purposes. So whereas in 1960, four-fifth of the total savings could be used for business and other purposes, in 1981 only one-fifth could be used for other purposes.

Julian M. Snyder, International Moneyline: Former believers in an imminent economic "recovery" are running for the hills, and cries of "Depression!" now fill the media air. . . . Eventually you will have to learn to comprehend not just the well-known phenomenon of raging inflation, or just the less well-known phenomenon of a depression, but both phenomena at the same time.

The Wall Street Journal, February 22, 1982: Several of the nation's leading economic soothsayers are beginning to worry that the economy could collapse under the burden of high interest rates, plunging the nation into the first depression since the 1930s.

Newsweek, March 8, 1982 (quoting Fred Fields, manager of a credit counseling center in Detroit): The average person we see nowadays has three house payments due, $315 in gas bills, $180 in Edison [utility] bills, $150 in water bills, a phone bill as high as $300 — and he's waiting for work.

The Wall Street Journal, March 9, 1982 (from Robert W. Merry's discussion of the budget dilemma facing Congressional Republicans): . . . persistently high interest rates are spreading the kind of fear and frustration that in Congress translate into two words: Do something. Right now.

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