The Recession Dilema - What to Do Now

Everywhere you look all you see and all you hear is recession. Company after company is declaring bankruptcy, thousands of homes have been lost to foreclosure, hundreds of thousands of jobs are being lost to downsizing. The pundits are even debating whether we are in a recession or a full-blown depression. When will it end?

Recently, I opened a copy of Real Simple magazine. In the Editor’s Notes in the front of the magazine, the editor discussed the dilemma facing those whose jobs and finances have not yet been touched by any of these recession tragedies.

That dilemma is, do I take advantage of the recession and buy now at the ridiculously low prices? Or do I save every penny in case “the worst” happens and I need it later?

How the general public responds to those and similar questions will have a major impact on just how long it will take us to recover from the current financial crisis the recession has caused.

It is human nature to want to curl up and hibernate when times are bad. We go into protectionist mode, attempting to conserve whatever we have, waiting for those in authority to fix the problems and make it safe for us to venture out again.

Unfortunately, this action - or lack of it -  has a tendency to exacerbate the problems. In the case of a recession, when people stop spending, businesses don’t make money. This causes the businesses to lay off workers or even to declare bankruptcy. These unemployed workers now have even less money to spend. They risk losing their cars and homes. They can’t afford to buy new clothes or to take a vacation or even to go out to dinner. So, they spend even less.  It becomes a vicious circle.

There is an answer. There is a way to get us out of this recession. It will come as a shock to most people. It involves a giant leap of faith. It involves going against everything we have been taught for most of our lives. The way to solve our financial crisis is for everyone to start spending.

This is totally foreign to most people. All of our lives we have all been taught to work hard and save our money. We have been taught that we must put money away for a rainy day and to do without now in order to have something later.

It’s time to wake up and realize that what we have been taught just doesn’t work anymore. It is time to seek a new solution to our problems. We must open our eyes and realize that if this crisis is not resolved, it could spiral downward until there are no businesses, no one has a job, and our society totally collapses.

All over the country people are looking to the government to rescue us. They expect the government to have the answers. They expect the government to have a magic bullet that will solve everything and we can go back to the way we were before. That is not going to happen.

There is no magic bullet. The President can’t waive a magic wand and say, “Recession Be Gone!” There is no painless way to restore our economy. To get the economy going will take money and lots of it. The Government is priming the pump. The stimulus package is designed to stimulate spending. But the government can’t do it alone. Each and every one of us who is able must do our part. We must spend like there is no tomorrow, because if we don’t – there may not be.