The US Economy: One Woman’s Perspective

30 September 2008, 6:30 UhrEconomics, Interesting ArticlesSingle Ma

The US world economy is facing the worst financial crisis since the Great Depression - bank and brokerage firm failures, stock market plunge, over valued housing market, mortgage foreclosures, credit crunch, job losses, etc.  The bubble has popped and ish has finally hit the fan.

By the way, the $700 Billion Rescue Bill was unveiled on Sunday and I blogged about it here.  But then, the bailout failed and now lawmakers are pointing fingers.

People want to know what I think about all of this. To be honest, I don’t know yet.  You see, I’m a chess player.  When things are happening that makes me uncomfortable, I don’t talk about it much.  I don’t make assumptions or speculate.  I don’t form an opinion until I have enough information.  However, I’m a keen observer.  I read.  I watch.  I listen.  I study.

Further, I do not respond to fear as a result of media reports because I am not afraid of what’s happening. It was expected.  If it were up to me, I’d let nature take its course - what goes up must come down - and deal with the consequences.

Am I affected by the economic turmoil? Absolutely!  I pay taxes, I own a home, and I have savings accounts, a 401k, IRA, and investments like the average middle class American.  My job is secure and unrelated to the financial industry, but nothing is promised or guaranteed.  I have disposable income, while plentiful, it is limited and further reduced by the rise in prices.

When big  businesses fail and our government wants to rescue, my radar stands at attention.  People who think they are so far removed or aren’t affected by these events are foolish.  Although I’m comfortable financially, I’m not living under a rock either.  The only bright side for me is that I live within my means and don’t rely on credit to sustain my lifestyle.  Oh, and I don’t have any debt to pay off either.  But I’m still affected in other ways.

Will I adjust my financial plans because of it? Probably not, but I don’t know yet.  My 401k and non-retirement investments are heavily weighted in stocks - large cap, small cap, and international.  My balance is probably $0.50 by now. LOL!  On one hand, I’m well diversified and won’t need the money for another 25+ years, so I can bear the risk.  At least that’s what my rational alter ego tells me.  But on the other hand, I’m human.  Watching my account balances decrease after making hefty bi-wkly contributions is emotionally draining.  However, I will not make any financial decisions unless I am absolutely confident they are the best decisions for me.  Like playing chess, when I decide to make a move, it will either keep me ahead of the curve, out of harm’s way, or - if harm is inevitable - have the least impact.  Until then, I will continue to read, watch, listen, and study.  If anything changes, you’ll be the first to know.

In the meantime, here are some questions I’ve pondered about the state of our economy:

  • What’s the difference between a bailout and a handout? You know…like welfare.  Hmm.
  • Why should the government help businesses that made poor decision, if they aren’t going to help the individuals who also made poor decisions for the exact same reason?
  • If the government decides to use my tax dollars to help in ANY way, does that mean when the banks recover, I (a taxpayer) will get a share of the profits?
  • What happened to capitalism?  The land of opportunity based on ingenuity, but where businesses fail all the time.  Are we turning into a socialist society?  If so, can we get FREE HEALTHCARE for every “legal” American citizen?  Please and Thank You.

I have more questions than answers.  If you’re inquisitive like me, you may appreciate these articles.

Educational Articles:

Helpful Articles:

Feel free to share your thoughts, fears, or concerns in the comments.

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    7 comments:

    1. Single Ma, 30 September 2008, 10:59

      Sorry, I didn’t realize comments were disabled. We’re up and running now.

       
    2. Erica Douglass, 30 September 2008, 11:28

      Hi Single Ma,

      Thank you for this post. So many people are just running around scared. You bring a level head to the discussion.

      I believe that we can solve the credit crisis ourselves, but realistically, that is not going to avoid a recession either. It just obviates the need for a $700 billion bailout.

      A bailout only vindicates those who gorged on debt. We have to reframe how we think about money, and particularly debt, as a society. This will take time, but eventually, a new attitude toward money will help us build a more stable society that relies less on bubbles.

      I applaud what you’re doing in this area to educate others about saving and frugality through your own stories.

      -Erica

       
    3. caryn, 30 September 2008, 13:29

      i’m so glad to know i’m not the only person that is wondering when the US became a socialist nation(w/out the socialist benefits of paid medical leave and universal healthcare). i’m not relishing the idea of living through a recession/depression/economic bust, esp. since i behaved myself and didn’t buy a home i couldn’t afford or rack up a bunch of debt, but hey, it’s part of the capitalist system. what i’m not willing to do is let my tax dollars go to bailing out companies that should have known better and have been given too many govt handouts already. how about you spend my tax dollars on the aforementioned universal healthcare, or education, or some other social need that should be addressed? And I don’t appreciate the gov’t trying to scare me silly with threats of depression and job loss and dismal economic forecasts. This economic “crisis” only makes it more clear to me how much my vote counts this November. You can guarantee I will be at the polls making my voice heard.

       
    4. Moneymonk, 30 September 2008, 14:05

      I’m not changing a thing. Slow and steady wins the race

       
    5. Sistah Ant, 30 September 2008, 15:55

      I agree with your perspective. I’m not making any drastic moves myself. But I’m keeping an eye on things. My major hope is that if a drastic move is required, I’m not so lethargic that I miss the cue and wind up losing money.

       
    6. Rufina, 30 September 2008, 16:41

      Bailout and handout is the same - walks like, talks like, looks like-it is then
      so now we are giving welfare to executives who will jump with golden parachutes the moment they get a chance
      if Feds want to give handout to big fat cats, then they should castrate the ability of those fat cats to bite huge chunks of money for their salaries and annual bonuses. Cap the salaries at $300-500K and anything after that should be only profit sharing or dividends or somehow tied to performance of the company and its financial health
      Dammit, how did this country come to this? I swear, we are worried about terrorists from Middle East, and they are right here, in America, downtown Manhattan, at the cigar bar on Broad street, puffing and pondering their next move. There is no Korean nuclear bomb, or Iran or Russians dropping stuff on us, or Bin-Laden from all the way from Afghanistan-real terrorists are right here, they are greedy CEOs/CFOs and elected politicians

       
    7. Desiree', 30 September 2008, 19:28

      I also have more questions regarding the current state of our economy than answer to “fix” the problem! I’m in Michigan and I just don’t see the jobs Michigandars relied on returning. The automotive industry. I see it being like states where the steel mills moved and entire communities suffered. We need jobs! Not just employment, we need middle class, working family jobs. And then and only then will America function as it once was. You cannot have an economy if people are not working!