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The US Economy: One Woman’s Perspective

September 30th, 2008 Comments(7)

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.

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