The recession may be over?

Read:  http://news.yahoo.com/s/ap/20090909/ap_on_bi_ge/us_economy

Perhaps the logic the government is employing is the hope that if they say this enough times we will eventually believe it. As if, we American's will simply overlook the other articles discussing unemployment, mortgage delinquency rates, the declining value of the dollar, and our declining global economic status. Nobody in the government wants an economic disaster on their watch and they'll max out the credit cards to prevent it – but will it work?

As mentioned in earlier post, the federal government has spent 7 trillion dollars in interest alone since 1988. The government spends far more money than it takes in and it continues to borrow more money than it can repay. What is even scarier is the fact the government continues to think of new programs (health care) to create when it's unable to pay for the existing ones. You don't need to be a financial genus to recognize this doesn't make a lot of good financial sense.

Why you may ask yourself why do I bring this up – after all, I write personal finance articles not economic dissertations. There are several reason and they all affect you.

First, the government has quickly become the worlds largest debtor. They are sucking up available credit like a super vacuum, competing with you and business for a limited pool of money. Of course, another problem we face is the government is sucking up money that doesn't exist, thereby leaving the Federal Reserve Bank to print more, thereby declining value of the dollar. Now this is the crazy part. The federal government is releasing the money as fast as it can and it's only released less than a third of what they've planned – the dollar is plummeting fast and they're not even close to finishing the devaluation the dollar! Do you remember the day when it cost a nickel for loaf of bread – well soon we'll be saying, “wow, bread is on sale for only two-hundred and fifty dollars, that's fantastic!” And of course, that's the second problem – inflation.

This article isn't to point the finger at the evil government – after all, the government is comprised of people whom we've elected and we hold them to basically the same standard we hold ourselves. However, typically when we make financial mistakes it doesn't impact our entire community. Most of us have been raised to borrow, borrow, and borrow. We already know financial literacy is horribly low, yet knowing this fact hasn't raised it. As adults, it's your responsibility to live responsibly and pass this lifestyle onto to your children and the other people you influence.

Debt is bad. I said it before and I'll say it again. Nobody goes bankrupt for losing everything; you go bankrupt when you lose MORE than everything. Only debt leads to bankruptcy and ONLY DEBT. We won't be able to fix the larger issues that surround us if we're unable to tackle the issues directly in front of us. Focus on your personal finances, learn to live without debt, get out of debt, and then focus on helping someone you know do the same. If we can change the systemic perception of debt perhaps we can influence our elected officials to be far more responsible than they have been to this point. If nothing else, you'll enjoy the prosperity that debt and interest has been robbing from you and you'll at the very least, change your own life.

Now, say it with me, “Debt is bad.”


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