The One Entity that Never Suffers during a Recession

government building

It’s no secret that recessions are tough on businesses. But there is one entity that never seems to suffer during these economic downturns: the government. In fact, government spending actually INCREASES during recessions! The US Federal Government spends over $6.6 trillion dollars a year. 

Here’s a closer look at why this is the case and what it means for businesses.

1. Why does government spending increase during recessions?

There are a few reasons for this. First, when businesses start to fail, the government steps in with social programs like unemployment insurance and food stamps to help people get by. Second, the government also spends money on stimulus programs designed to jumpstart the economy. These programs can take the form of tax breaks, infrastructure projects, or even cash handouts. 

2. What does this mean for businesses? 

Government spending increases during recessions because the government wants to stabilize the economy. This is good news for businesses because it means that there is more money circulating throughout the economy as a whole. When people have more money, they’re more likely to spend it—and that’s good news for businesses! 

3. How can businesses take advantage of this? 

There are a few ways businesses can take advantage of increased government spending during recessions. One is to make sure that your business is certified in order to compete for set-aside contracts. Another is to keep an eye on government contracting opportunities—recessions often lead to an increase in government contracts as agencies look for ways to save money. Finally, you can also position your business as a go-to provider for products or services that help people weather a recession (think affordable luxury items or budget-friendly services). 

While recessions are tough on businesses, there is one silver lining: the government usually steps in with increased spending. This increased spending leads to more money circulating throughout the economy, which is good news for businesses. To take advantage of this, make sure your products or services are eligible for any stimulus programs that might be available and keep an eye out for government contracting opportunities. You can also position your business as a go-to provider for products or services that help people weather a recession. By taking advantage of increased government spending during economic downturns, you can help ensure that your business comes out ahead when the dust settles!

At BizCentral USA, we specialize in getting clients certified and connecting them to contracts worth hundreds of thousands of dollars. Give us a call today at (833) 217-9667 for a free consultation with an Executive Consultant.

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