Good side of recession

The U.S. economy has been officially in a recession since December 2007 as significant decline in economic activity, triggered by the housing downturn starting in 2006, spread across the economy, lasting more than a few months. The economy contracted at a seasonally adjusted 0.5 percent annual rate in the third quarter of 2008.

For sure the recession is bad as it drives up unemployment. It has the good side though. Here are some benefits of the recession:

• Unsupportable debts are being erased.
• Inefficient businesses are wiped out.
• Dying industries are being cleaned up.
• Workers are exiting dying industries.
• Consumers are rebuilding their savings
• Consumers are lowering their living standards to match reality.
• Asset prices, especially houses and stocks prices, are falling to or below their fair value
• Assets taken away from weak hands and given to strong ones (through distress sales, foreclosures, and bankruptcies) create the conditions for future growth.