Tuesday, July 01, 2008

Recession Woes

This morning I heard a commentator on MSNBC state that because of rising fuel and food costs alone, the average person is spending on average of $140 more per month than they were just a few months ago. That's pretty scary for a lot of families.

On the other hand, though, perhaps the state of our economy is an opportunity for change. I just read a great article from Bankrate. Here's an excerpt:

If you are old enough to have worn a mood ring, Earth shoes or bell-bottoms the first time around, you probably recall the "stagflation" days of the 1970s with a bemused mix of humor, national pride and nostalgia.

The forecast was just as dire back then, and for good reason. In 1975, inflation topped 14 percent, unemployment approached 6 percent (but doubled that in some locales), and fuel and food prices were headed skyward.

Most of us would be well into the Reagan years before our wallets grew appreciably heavier.

The funny thing is, I don't remember the sacrifice. We drove used cars and lived within our means, since car leasing and credit cards were not yet widespread.

We rented and shared apartments, since the average home mortgage rate hovered around 10 percent.

We shouldered none of the financial burden of such modern conveniences as cell phones, high-speed Internet or fitness center memberships.

No one wants a recession, of course. It can cause serious economic pain for millions.

However, economists tell us there are some reasons to actually welcome and perhaps even embrace a recession. After all, a recession is the ebb part of the natural ebb and flow of the U.S. economy.

Read more.

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