There is a Recession When My Economy is in a Bad Situation!
August 24th, 2011
A dictionary may define a recession as “A significant decline in general economic activity over a period of time” In my personal opinion some US Citizens have fall and come out of a recession in their personal economy a few times before it was ever declared by the government. The state of mind of the general population due to their personal situation could help generate a national recession. The best way to prevent a decline of the country’s economy is, I think, to help its citizens come out of their own personal recession.
When someone loses his job due to any circumstance, in a small way, affects others. The money he used to spend every weekend to take his family out to see a movie or the “extras” he used to spend in other things will be money lost by others in the form of revenue. It is only noticed by the rest of the society when a massive lost of jobs or a significant slow down of the general production of the country happens. If you have a job and things go smooth, if there is money to spend and your family has the basics to live, then you are not in a recession even if the rest of the country is falling a part. On the other hand, If the chain of events reaches the company in which you work and you have to start looking for a different way to provide for your family because the money that you make is not enough, be careful because the decline of your personal economy may take you to a personal recession, and guess what? It will be very unlikely that the government will come up with extra funds to help you get out of that hole if it only affects you.
You may come out of your personal recession but the experience you just went through may still affect others. After that very unpleasant experience you may just want to prevent it from happening again. You may just reduce your expenses in order to plan for the future. It means less money in the market and, if enough people think the same way, a slow down of sales for the local commerce. The circulation of the money means new jobs to keep up with the demand of products therefore we need people to be able to spend their money in a healthy way.
During a recession companies go out of business causing the lost of many jobs. The people that got laid off will get into a recession along with the rest of the society due to our economic structure by which some companies depend on others to survive. The government then may declare a recession and will start looking for ways to “save” the economy from slowing further down. The reduction of the interest for loans and other banking purposes by the Federal Reserve is a way to stimulate people to borrow and expend money. The generation of jobs with money that came out of our own taxes may help reactivate the economy. It will put the necessary money in circulation to increase the need of goods and services, which, at the same time, will generate more jobs and more money. The country could go back to have a health economy but, what about those individuals that did not get absorbed by the economic change. In other words, what about if the economy is in good health and I don’t have a job?
I think that if I do not have a job and a way to get money, then I am in a recession. There are significant affords by the government to reduce unemployment but other things may come in to effect in particular situations. Some companies may consider you too young or too old to hire you. Some others may require skills that you do not have for a particular position. You may not have the experience for the job they want to cover. It could happen that in the town in which you live all the jobs are taken and it could be difficult for you to move because, guess what you need to move? Yes, that is right! You need money. The advantage of our country is the social help programs implemented by the states and the federal government, which, thanks to the taxes paid by the working population, will help you if you get under the poverty level.
Due to different situations that were described above, some people may only want to think about their own situation before declaring a recession. Our society may be a victim of different economic phenomenon and the fear of the social analyst that is widely publicized may be contagious. I am not saying that you should not care about the general social situation, what I am trying to say is that we could contribute to make it worst if we suddenly change our habits. Make sure to keep going with your normal life before pushing everybody else towards an economic slowdown. In my case, there is a recession when my personal economy is suffering.
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