Yesterday the stock market dropped over 500 point, 4.3%. This is more evidence that we aren't going to bounce out of the recession, but we already knew this. As I wrote earlier, our economy isn't responding to the usual medicine.
What is the outlook? It feels strange to be a layman economic forecaster, but I've already been doing it in my own head and for my family, so now I'll go public. We are going to have some relatively hard times.Unemployment is going to hover around 10%, maybe higher. Barely anyone but the lowest will be getting a raise. We'll have a lot of youth unemployment.
The best way to deal with these financially uncertain times is to be careful with your resources. Not just your money, but also your relationships. You shouldn't burn though your money, or burn your bridges at home or at work. Party less, waste not, save more for the rainier days. Enjoy the simple pleasures. It doesn't have a feel awful.
I have a relative who lives in Oklahoma, which was hit especially hard during the Depression. The stories from the old-timers there is that everyone was dirt poor, but didn't know it because all their neighbors lived the same way. Life went on. And so it will for us, but not nearly so impoverished. We are a much richer country than back then, so we can weather a downturn. We will be making sacrifices, but do we need to fear sacrifices? I hope we aren't so incredibly greedy that we can't give up anything.
One problem with my prescription for dealing with the financial aspects of our economy is that it doesn't help lift the country out of recession. It's a valid complaint. However, I keep thinking about Japan and their unsuccessful attempts to spend their way out of their recession. We already have a huge debt. Let's not add to it in vain attempts to escape this fate. As I wrote before, perhaps the best way to grow is slow, organic, small steps. I'm optimistic we can do it.