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Ok, I’m Convinced The Economy Downturn Is Really Bad, Now What?

By: Steve Johnson

6/22/2009 - 16 Comments

Yesterday, one of my readers told me that he is now convinced that the economy is heading into a very deep spiral that will take years to recover from.

He told me that I have convinced him that the economy is tanking and the financial media and political optimistic spin is nothing but BS.

He said that he is now looking for more ideas about what to do about it and would like me to write more articles regarding what do to.

You’re Welcome

The conversation was probably the closest thing to ‘thank you’ that I will ever get.  After almost two years of pointing out how bad things could get and how the government’s plans are only going to make things much worse, I found a little redemption.

It’s not always easy going against the grain and against a very popular president to tell the truth about the state of the US economy.  There are still a lot of people that believe in Obama so much that they think he can do the impossible – revive the economy and avoid a deep recession. 

Yet, his promises and projections are beginning to fall apart.  Before the passage of the $787 stimulus bill, Obama predicted that unemployment would peak at 8 percent and start to improve by the end of 2009.  Unemployment is already at 9.4 percent and is not likely to see a bottom for many months or perhaps years. 

The leading cause of the recession was and remains a decade of expansion of credit and the irresponsible actions of the Federal Reserve to lower interest rates. This will not escape the history books and it could have been prevented. Both of which were politically motivated and led to the massive distortions in the economy that resulted in over-production and over-consumption. The result is a crumbling economy.

What To Do

I have a lot of ideas about what to do, but 70% of my articles on this blog have been directed at convincing my readers that the recession is going to be very, very deep. 

Based on this readers’ suggestion, I think it’s time to start talking more about what to do. Two years ago, very few people were interested in reading about how to save money or cut back on expenses, because they were convinced that the recession would be short lived. 

The reason is because most of these ideas result in changing one’s lifestyle to accommodate a lower standard of living.  Adjusting to a lower standard of living is a painful process and not something anyone wants to willing do unless they have to. 

But the table has turned and now millions of American’s are looking for ways to painfully cut costs to survive the recession without losing the shirt on their back.

To most people, the first step is getting out of debt.  That means making a list of the debtors that you own money to and figuring out what you can live without so that you can create a plan to pay off all debts. The next step is to figure out how much you are worth and create a plan to grow that every month.

Time Is Slipping Away

Time is running out, many have already lost a lot.  This is not the time to ignore your personal finances.  This is a time to get your finances in order as quick as you can.  The sooner you face the music the more you will be able to position your family to manage the lengthy recession that is just getting started.

I believe the recession will get much worse before it gets any better and the risks of a currency crisis (with a sinking dollar) are growing every day. 

I plan to write more articles about radical ways to prepare, like starting a business to secure your own income, completely paying off your house, homeschooling to reduce education expenses while giving your children a chance at competing in the global economy and living on a single income in a smaller house.  These ideas and more will drastically change the culture and social fabric of America. 

The most important thing to do is to realize what is really going on. The public needs to realize that the government has messed up the economy and we need new fiscal conservative leadership to radically reduce spending before the recession can be stopped. The public needs to realize that the nation is broke because of the social programs that we asked for.  The free lunch wasn't free after all.

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