Recession, economy, financial planning, these
are all ideas we are tired of hearing about. Well, my friend, get
over it, the National Bureau of Economic Research is starting to
talk about another round of financial mishaps that are set to come
our way. This is called a ‘double dip’ recession. In specific
terms it means a time when the GDP or Gross Domestic Product slides
back to negative after a short-lived time of positive growth.
Basically we are all aboard the financial
roller coaster with no stopping in site. We have survived the
plummet of Fannie Mae and Freddie Mac nose-diving out of control.
We have lived through the twist in the ride that was Unemployment
rising to 7.9. We toughed out the corkscrew that was the housing
collapse and we have dealt with the out of control spin that was
major American companies begging for a bailout. And now, when this
wild ride looks over and the light at the end of the tunnel is
within reach we are being told to strap in for another go round.
There are a few signs that are pointing towards
the fact that the recession isn’t over yet. One of the big ones
pertains to the housing market, last week- despite signs of recent
progress- the numbers were awful, in fact there is a stiff and steep
drop in new home sales. The housing market is big industry and to
watch that fall again can have catastrophic results on the face of
our current economic makeup.
Another big killer to our recent good fortune
is the fact that employment is still down. It is hard for people to
circulate money when they don’t have any coming in. In fact, our
Vice President, Joe Biden, is quoted with saying that “there is no
possibility to restore [the] 8 million jobs already lost in the
“Great Recession”. Wow that makes me feel better.
Another issue that may keep us in the red is a
governmental view that it is not time to spend. Many people
criticize governments for overspending in a time of crisis, but many
if not most economists believe that spending is just what needs to
be done to get that money circulating and to get the employment rate
up.
Though it is easy to pass judgment on our
government for spending our tax dollars, the argument for spending
now and saving when the economy is yet again robust is a good one.
So long as we spend wisely on projects that generate real long term
jobs.
This way jobs can be created and the economy
can have the chance to build. Right now a focus on global spending
is starting to have people believe that it is the time to spend.
Lets look at how this has benefited us in the past, in 1937 the
country was just starting to emerge from the Great Depression when
there was a sudden focus put on austerity (raising taxes to pay off
governmental debts), this is widely believed to lead to 4 years of
halted growth and a longer recession. If we can’t listen to our
experts, can we listen to our history books instead of making the
same mistakes all over again?
"Your" Money Matters, by
Carl Hampton
From the Author of "From
Credit Despair To Credit Millionaire."
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