Recession, What Recession?
Well, the political and financial pundits have been arguing back and forth on this for almost all of 2007, and it still “supposedly” hasn’t happened, even though some are saying we may be steeped knee deep in one right now, it just isn’t being called out that way yet. It’s that ugly 3 syllable word - recession, and it may be coming our way according to some chicken littles, or not according to some naysayers who don’t say it’s not possible, they just believe it may not happen.
Not very reassuring, is it? However, I do believe that media hype has played into the frenzy, and the fact that our unemployment rate went up further than expected in the latest jobs report and the fact that stocks tanked last Friday, combined with the increased gas prices and consumers tightening their pocket books, have only played us more into the hands of a recession than we realize.
The problem is, hysteria like this creates tighter fists around consumer money, and this tightness only further restrains the economy because no one is spending money. True, if you are one who is directly affected by unemployment, by all means, you need to tighten the wallet a lot, but this is not the case for all consumers, and the hysteria has created a domino effect of money tightness where there doesn’t even necessarily have to be any.
What? You say, don’t save? Well no, I’m all for saving, and in fact have been going through a saving streak myself lately to the point where I feel almost allergic to spending money on anything I don’t totally “need”, but I am trying to say that we might be furthering our problems by not spending freely as we can.
With the increased bad credit problems as well as the whole “subprime” mortgage lending fiasco still in its thickest right now (hey, did you know that subprime has won out as word of the year by the way, tell me there’s no mass hysteria there!), it doesn’t exactly look bright right now, but the fact of the matter is that we’ve been through recessions before and we always pull out of them ok.
The government is trying to help us out, but with the current turmoil, I sometimes wonder if they should take more of a laissez fare attitude and butt out and let the economy run this course, which is only natural. Hard to say, but some economists do believe that it’s not for the government to bail us out of bleak economies. Yikes, who knows! Makes my head spin just thinking about all the ins and outs of the situation!
