The Economy

The media continues to cry, "Recession!" all the more now that the president, along with presidential nominees, are calling our current economic situation a crisis. I'm no economics genius, but my goal is simply to find out how the current events are going to affect average American citizens.

I'd like to begin by saying that the masses are in control. We choose whether to remain active in the economy or to hesitate for fear of being too risky. The Great Depression morphed into the feared event it was through everyday, average citizens choosing not to buy, not to borrow, and not to invest. Soon, there was less of a demand in all of those products and services. That loss in demand caused those product and service providers to need less employees to do this lesser amount of work demanded. That resulted in a loss of jobs, which started the vicious cycle all over again.

BUT! Even when the Great Depression was at its worst, 75% of the people, who wanted jobs, had jobs. That doesn't mean that their lives were not affected by the catastrophic changes in the economy; it does mean, however, that their lives remained fairly normal.

The opinions of expert econimists vary rather extremely, which makes me question how accurate these economic predictions can actually be. Some are saying that if the government sits back and does nothing, we're sure to enter into a recession. Some are saying that if the government intervenes in our "free market," we're sure to enter into a recession. However, most econimists admit that no matter what happens, our country will probably enter into some sort of a recession. However, the severity of that recession cannot possibly be predicted, from what I understand, because we control the economy.

Another thing to keep in mind is that the media has a responsibility to report whatever news is available to them. Unfortunately, the biggest news, as of late, is the falling economy. I say unfortunately because the negativity that truly does exist is seemingly getting worse and worse by the second, simply because the media continues to restate and investigate the same story. Don't assume that because AIG had some major problems that you're no longer going to have access to credit. This may occur, especially if the average Americans choose to withdraw from activity within the economy, but will more likely be a gradual decrease in credit availability.


Things to be concerned about:

Is your bank an FDIC member? (insured by the government for up to $100,000 per customer)

What's happening with your 401K? (Pay attention to the specific numbers, not just the media!)

Are you contributing to the recovery or the fall of the economy? (Pay your bills on time.)



Now, whether or not tossing 700 billion dollars into the stock market will help matters is something we, at this point, will get little say in. However, I think it's clear that some limitations put on the power of the Secretary of Treasury and on stock market fat cats would sure bring a little bit of piece to our minds.

I'll probably write more on this topic later. Feel free to add information or critique my information. If you'd like sources, let me know!