On Eve of Debate it's OFFICIAL...We Are In a Recession

On the eve of the debate tonight, the Federal Reserve has made official what many of us have know now for over a year. America is in a recession! So states the head of the San Francisco branch of the Federal Reserve, Janet Yellen .

This official pronouncement could greatly change the flavor of the debate tonight if the moderator brings it up as a question early on in the debate. This news further makes the point that all other issues including Ayars take at best a second seat to the economy.

Federal Reserve Official: U.S. Economy in Recession

Tuesday, October 14, 2008

NEW YORK — The United States has slipped into recession, the head of the San Francisco branch of the Federal Reserve, the nation's central bank, said Tuesday.

"The recent flow of economic data suggests that the economy was weaker than expected in the third quarter, probably showing essentially no growth at all," said Janet Yellen Tuesday in an address in Palo Alto, California.

"Growth in the fourth quarter appears to be weaker yet, with an outright contraction quite likely," she said. "Indeed, the U.S. economy appears to be in a recession."

Yellen spoke just hours after official data showed the budget deficit tripled in size in the 2007-08 accounting year to $455 billion, or 3.2 percent of gross domestic product.

Her remarks also followed a dramatic period that saw the U.S. government, for the first time since the Great Depression, partially nationalize major banks in its latest move to restore confidence to badly-shaken financial markets.

Economic downturns are a double blow for government budgets because they reduce tax revenue for governments and increase the need for social security spending in the form of unemployment benefits.