Recession Busting - We Have To Stop!

 

First and foremost we need to STOP SPENDING and PAY OFF DEBT.  Despite our current economic situation and colossal rate of inflation, like none other than we’ve ever seen before, CONSUMER SPENDING IS AT AN ALL TIME HIGH.  So is our consumer household debt, which as a few weeks ago hit an all time high of over SEVENTEEN TRILLION DOLLARS!  This is not just a United States problem though.  It is a problem WORLDWIDE.

 

In an effort to curb spending and bring down consumer debt the Federal Reserve here in the U.S. raised interest rates 11 times in the past 18 months with NO CHANGE.  ZERO!  Consumer spending has continued while consumer debt continues to rise.  If you are at all interested in the economy of your country, know this:  WE HAVE TO STOP SPENDING LIKE THERE IS NO TOMORROW or else there will literally be no tomorrow.  Not like what you want it to be anyway.

 

In the past, whenever we’ve gone into a recession people pulled back, worked with what they had, paid off any debt they might have and the economy recovered.  People were willing to do that in order to make their circumstances better.  However, now it seems people are not willing to make sacrifices or compromise on anything.  They want what they want and they want it now.  Preferably ordered online and delivered to their doorstep.

 

And because wages have not kept up with the rate of inflation, they never do, people don’t have the means to pay off their credit card bills or pay cash for a car, a couch, even a pair of pants.  Instead they make the minimal payments necessary and keep on going.  Very few people have a savings account or much stashed away for retirement.  But anyone with two brain cells still on speaking terms knows this type of behavior can’t last forever.  Eventually there is no more credit available and people will begin to file for bankruptcy.

 

In the late 70s and early 80s we got a good taste of what happens when massive amounts of people file for bankruptcy.  Consumer bankruptcy leads to corporate bankruptcy and even higher interest rates because lenders become extremely cautious.  People cannot afford or even qualify for a car loan or a mortgage.  Companies close their doors and unemployment sky rockets.  Then we are forced to make changes because there is no other alternative, but it doesn’t have to come to that if people are willing to exercise some self control.

 

Living within our means, (or better yet below them) cutting back and paying off debt truly needs to happen in order to straighten out our current economic situation.  There is a ton of help out there available to people to do just that.  Dave Ramsey as well as many others are on Youtube to educate anyone on how to straighten out their own finances.  There are loads of blogs and videos online to help people figure it out.  Need even more help?  Contact a financial advisor and get on board.  There are ways to fix any financial situation one finds them to be in.

 

While talking about money can sometimes be taboo I encourage you to be open about talking to your family, friends, children, co-workers, even total strangers about this very subject.  Encourage them to stop ordering stuff online, set a budget for groceries and stick to it, cook at home and stop wasting food, pay cash for that next winter coat or whatever it is they think they need.  Put the want list on hold.  Pay off those credit card bills and car loans.  Stop complaining about inflation and do something about it.  People have the ability and power to turn any situation around.  They just have to be willing.