Wednesday, March 7, 2012

Perspectives on the Economy

"I have lived through a real recession. A lot of my current clients and coaching members and and a lot of readers of this book have not. I know what it is like. You may not. I just about started out in business in the Jimmy Carter economy. Carter single-handedly did more economic damage at a faster pace than any president in history. In short order, he had us with a nasty trifecta ticket in hand: 18% inflation, 18% interest, and 18% unemployment. Plus gas lines."- Dan S. Kennedy

In 2007, a Gallup poll reported that 92% of Americans were experiencing angst or depression over the state of the economy. The very same month of that poll, Rush Limbaugh (whom I am not a fan of, but we'll examine his thoughts for the sake of argument) sent out newsletter with what he said were facts about the economy. Like:
  • The GDP grew 3.9% in the third quarter, faster than expected.
  • Productivity grew 4.9% in the third quarter, the fastest pace in four years.
  • Since January, 1.25 million non-farm jobs had been created, totaling 8.4 million new jobs added since the Bush tax cuts.
  • The GDP was up 18.5%
  • The deficit had fallen to just 1.2% of the GDP
On the other hand, people are losing their houses.

A relative of mine worked for a company that was granting mortgages during the housing boom and they skipped credit checks. Politicians told us that it was every American's right to "own" a home. (When you have a mortgage on a home, you don't own it, the bank does. This can be a very good arrangement for you and the bank if you are prudent about the process. But it can get you into a lot of trouble if you're not using good judgement.) Some people were financing homes that cost several hundreds of thousands of dollars with very little money down.

So this begs the question, if we believe it is our right to get something for nothing, is there something wrong with the economy or with us?

Today I am thankful for warm clothes.

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