Recession?

Recession. It’s practically a buzz word now. Politicians are using it left and right, it shows up each evening in our local news broadcasts, and talk show hosts are lining up guest speakers to weigh in on the topic. So is it time to panic? Are we in for a repeat of the double-digit unemployment rates that hit during the recession of the 70’s?

Well don’t go jumping on the recession bandwagon just yet….because we aren’t in one, or even near one quite yet. “What!” “How can you say that Gabe?” “Don’t you see what’s going on in the economy?” I’m sure those questions and others are out there in abundance, but the answer is quite easy to find by looking at the definition of a recession.

Recession: “a period of slow economic growth. Defined by economists as two consecutive quarters (6 months) of negative gross domestic product.” – Websters New World, 2003

The GDP hasn’t decreased for even one month over the past year. That means exports are up, industry is growing, and businesses are hiring as many as they are firing. I know this flies in the face of everything you see in most media outlets these days, but it’s the TRUTH! Sure, there are certain industries that have slowed or leveled off, like the housing market, but there are plenty out there that are growing at a healthy rate. Look at retail sales in your local area. Are people still lining up on Friday nights to see a movie? Are there still lines in the grocery store? How about the drive-thru at McDonald’s or Starbucks? If there was a real recession in progress people would be tighter with their money. As long as people are out blowing money in retail markets the financial sky isn’t falling in.

So just remember this the next time some politician is spouting that they have the “best plan to save our economy,” our economy is doing pretty good. What our economy is experiencing is a correction that needs to happen. Over-lending to people that shouldn’t have been borrowing money in the first place has a been a big factor in what our economy is going through, and it will take some time to get these industries healthy again. We don’t need a “stimulus package” or other government intervention to help bail people out of stupid financial decisions they have made. We need people to feel the effect and consequences of their poor decisions, and CHANGE THEIR BEHAVIOR! That’s the ONLY sure way to correct the current problems our economy is facing and not repeat them 10 or 15 years down the road. The government isn’t the answer, you are the answer. A bank isn’t the answer, you are the answer. Your behaviors will determine if you can survive a real recession.