According to government economists and some news media, we can celebrate now because "the recession has ended". Sometimes I have to wonder what those people are smoking. These are the same experts who argued throughout 2008 that there was no recession, only to then proclaim "we've been in a recession for one year". Many of us out here in the hinterlands already knew that, didn't we?
It doesn't matter what is said about the economy. It is what it is and for the average person there has been no improvement since we fell off a cliff over two years ago. Job losses continue to rise and families are finding ways to live on less and to do without things they had to have just a year or two ago. Many young adults have never had to worry much about living within their means. Yes, they were broke as college students but even then there were government grants and student loans and many had the financial resources of parents to fall back on.
Young families had credit easily available with low minimums on credit cards and long loan terms on automobiles. There were homes available with artificially low interest rates and payments that could always be refinanced....couldn't they? Reality has hit many of us hard and the extended recession may result in drastic changes in lifestyle over the long term. The time has passed when we can just wait for things to get back to normal. The new normal is that our spending habits must change and adapt to the economic reality.
What have we been thinking? When did we decide we deserved a huge home with three bathrooms for our small family? When did shopping become our "right"? How many clothes do we need and how much jewelry can we wear? At what point did we decide that eating out at a restaurant wasn't an occasional treat but a requirement any time we didn't feel like cooking? What were we thinking when we gave our children every new electronic gizmo as soon as it was released or decided every child deserves his own TV, computer and phone in his room?
We abandoned common sense and frugality in the excitement of consumerism. Shopping, ordering, buying have become a way of life and to hear some complaints now you would think the ability to spend on anything we want is a constitutional guarantee. While we have been spending our money online and in the shopping malls, we've also expected government to provide safety nets, to care for those who can't take care of themselves (or who won't take care of themselves).
We've wanted better roads and bigger bridges, more government services and protection from anything with the potential to harm our lifestyle. We wanted it all and the lesson we're learning in this economy is that we can't afford it all. The increase savings rate in past months indicates some people understand the need to protect themselves from economic uncertainty as do the lackluster retail sales that continue from month to month. Some people have adopted a goal of becoming totally self sufficient, hoarding their cash in home safes and acquiring weapons for defense. At the other end of the spectrum, there are those who have blind faith that the lifestyle they enjoyed will return soon and all will be well.
The reality of our current economy is that we must change our values now. Foreclosures continue to climb and are no longer homes purchase by those who couldn't afford them taking high risk mortgages from greedy lenders. Bank failures are near record highs and the takeovers are straining the FDIC's ability to pay for them without drawings funds from the Treasury. Today family homes and farms are being lost to foreclosure by families who have owned those homes - and paid for them - for many years. Foreclosure statistics are only numbers. They don't reflect the fear and anxiety of a family with nowhere to live, the humiliation of losing your home and possessions that can't be stored, the tears of your children when you can't keep the family pets.
Far too many of our children have lost any sense of security and safety. Far too many tent cities are sprouting while homeless shelters are filled to capacity. The recession may be over for those on Wall Street and for those companies deemed too big to fail. For the rest of the population, this ongoing economic crisis requires an adjustment in how we live our lives and spend our money. For many, that's a hard reality to face.
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