Well if we speak on general level of economy all kinds of recession are a bad thing, after all we are speaking about the decrease of something in sense of economy. However, it is very normal for a recession to happen, in short logic there would be no growth without any recession, there will be no ups without downs. If we’re speaking normally in the United States, the average business cycle is 4.7 years which divided into 3.2 years of growth and 1.5 years of recession, which means in average 5 years of business 1.5 of them will be spend in condition of recess.
To simplify A booming economy will lead to a recession because the economy will overheat or create a bubble that will burst. The longer we artificially extend our expansion or economic boom, the bigger the recession we create. The natural business cycle’s economic boom will create more wealth than the recession will erode, for the example one of biggest recession in US happens during the great recession in 2007 which occurs due to the booming of real estate bubble that created during the 1991 – 2001 economic expansion.
So, if recession is something that is inevitable, what should we do? First and foremost is always plan ahead, when the economy is great and rising we need to prepare and divide the basket to prepare for the fall, start saving, create a safety net in case the economy will dampen soon, understanding your business and core operation in order to smartly cut the cost if the recession happens. Governments could also help stimulate the market through government spending and regulations. Increased government spending will increase the amount of economic activity. Regulations such as lowering interest rate will make it easier for businesses obtain the margins necessary to create a profit.
It is undoubtedly that we are currently in recession and it is both unfortunate and a little bit unexpected as the external factors of Covid-19 is also play a big part in the circumstances, and counting many other factors, right now it is undoubtedly hard and will be full of challenge which ultimately things might be easier said than done. But it’s too late to cry over the spoiled milk, we need to keep our head high and try our best to make out of the dire situation, while also start preparing to start running and save the day, and start preparing to make it out of the next recession. Good luck and stay healthy.