Recession over? Really?

So I wanted to try to spark some discussion on the blog today. I do a lot of lighthearted stuff here but I wanted to see if there was any interest in something with a bit more bite every once and a while. The recession is something that is effecting us all in some way. I get what the media is saying about it, but I want to know what you think. I’ve created a new category for “Your thoughts”. If this is successful, I’ll try to work in a post like this a couple times a month. Feel free to vent, but be respectful of others. No personal attacks.

I read a lot of news sources. Lately, I’ve been seeing more and more articles about the recession being over. The stock market is trending up. Consumer spending is up. Economists and Government officials are telling us that it’s over or should be by the end of the quarter. It’s time to have a party, right?

I’m not buying it. I’m not an economic expert, but I think the real measure that we are moving out of the recession is job growth or at least we stop losing jobs. We still lost 550,000 jobs last month. The official unemployment rate is about 9.5%. This doesn’t include the number of people who’s unemployment benefits have expired or those who have just stopped looking for work or those who are underemployed (those working part-time who would like full-time employment). Include those people and the unemployment rate jumps over 16%.

I’ve heard it said many times that a recession is when your neighbor loses his job, a depression is when you lose yours. I know a lot of people who have lost their jobs and I live in one of the states where our unemployment rate is lower than the national average. We have been very fortunate to both be employed to the level we wish to be.

The Questions

How is the economy where you are? How is your “personal economy”?

Do you think the recession is over?

What factors must improve before you will start to believe that the recession is over? Is the the stock market? Seeing companies make money again? Jobs growth? Consumer spending? Credit flowing again?

Do you barter?

This was originally a  quicktip, but became a full blown post.

For many of people, the economy sucks. Do you know the difference between a recession and a depression? A recession is when your neighbor loses his job, a depression is when you lose yours. I’m not sure where that originated but Howie Carr at WKRO in Boston says it all the time.

If money is tight, have you considered bartering? I actually do a lot of bartering. As an accountant, I have a service people need and people have services and products that I need (remember all barter transactions should be counted as income for your business for tax purposes). You can offer to trade services with a business or with people in your community. I also trade books with people all over the country through PaperBackSwap and just this week I found a site called SwapTree which allows you to swap books, cd’s, movies and video games.

You might think you have nothing to barter, but you would be wrong. You can barter babysitting services, lawn care and repair services, cooking services, looking in on an elderly neighbor, music or singing lessons, gardening services, computer lessons, painting classes, and heavy tool loaning, just to name a few. You could also do any of these things to make a bit of extra money as well.  Consider making a flyer for your services and distributing it around your neighborhood. At the bottom of the flyer, put “willing to barter for the following services” and list what you need.

Craig’s list has barter listings and many freecycle groups will allow bartering requests in their cafe. Check with your freecycle group for rules.

Do you barter?

Got Hope?

If you’ve visited the site, you know I’m a huge Dave Ramsey fan. Last night, he held a Town Hall for Hope, which was broadcast on TV, Radio and 6,000 locations worldwide. We watched it at our church.  He made a lot of wonderful points.

One of the best messages from the entire night was you’ve got to stop being afraid. Fear is killing the economy. The media keeps telling us this is the worst economy since the Great Depression. They tell is this is the next Great Depression. Really? How soon we forget.

During the Great Depression, the stock market dropped 89% and unemployment went as high as 25%. At it’s lowest point this year, the stock market dropped 57% from it’s all time high. The market is up 22% in the last seven weeks for an overall loss, since the all time high, of about 45%. The unemployment rate in February was 8.5%. That’s only 4% above full employment.

But Kristin, what about housing? Housing is a mess! There are problems in the housing market, but many of the foreclosure problems are localized. Here are some stats from Dave’s site (I’ve seen them elsewhere as well):

  • 50% of United States foreclosures in 2008 came from 35 counties in 12 states.
  • 20% of the United States’ population lives in these 35 counties.
  • Eight counties in Arizona, California, Florida and Nevada were the source of 25% of foreclosures.
  • 4.7 million homes were sold in February, 2009 alone, and only 860,000 homes were repossessed all of 2008.

I know there are homes in your area that are being foreclosed upon and it’s affecting your home value. My house has also lost value, but my house is where I live. It’s not an investment for me. It’s not an ATM. It’s my home. My ultimate goal is to pay off that home so I don’t have to pay for a home anymore. I’m not looking to upsize every few years. I’m not looking to cash out my equity to buy a car. I’m happy with the house we bought. It needs some work but I love the character and we plan to stay in this house. We plan to pay off this house and live debt free someday.

I have hope. I’m not afraid of the economy because we are in a better financial situation than we were in before. We’ve saved up a small emergency fund. My husband’s job is pretty safe and he works in a good field where he could get another job. Maybe not here but somewhere. I’ve got skills and we don’t rely on much of my income to live. There is still a lot of demand in my field and worst case scenario, I could go wait tables if I had to and we’d still get by. I’m not afraid to work.   Dave quoted his grandmother last night during the town hall; she would say “There’s a great place to go when you’re broke: to work!” Brilliant!

I’ve decided I’m not participating in the recession anymore. By that, I mean I will continue on the plan Jeff and I put in place. We will continue to save, we will continue to give, and we will continue to spend. Although, I gotta tell ya if the economy thinks it’s going to recover on the amount we spend, it’s got another thing coming.

How is the fear affecting you? Are you ready to let it go or did you not allow it to grip you in the first place? What are you doing to weather the downturn?