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Follow-up: Economic troubles hitting home
On Tuesday when we started the conversation on our Facebook page about the real impact of the bad economy, the DOW was back on the mend and the fallout from S&P downgrades seemed to be moderate. In that calm before the storm, however, we still felt that the blows to the economy are adding up and causing real people real headaches.
Boy is it, and according to one expert the kind of economic recession we have had will take years to pull out of.
- Renee Hibbert Greenleaf: “My daughter and her husband are living under the threat of foreclosure … two years and counting.”
- Jodie Henry: “Losing my home and trying to short sell it because of being unemployed for 2 years. Having to take a PT job in a completely new industry … making half the money.”
- Anne Ortakales Crandall: “I got my hours cut.”
Hold on tight
According to Joe Phillips, dean of the Albers School of Business at Seattle University, this range of economic impact on households up and down the economic scale is the key reason why economic recovery could take two more years.
Historically, Phillips said, “a recession triggered by a crisis in the financial sector, as ours was, and then when the crisis has an impact on most houses in the country … it takes the economy a very long to recover from that.”
- Christy Anderson: “… my substantial savings burned thru while semi-employed for 2.5 yrs.”
- Judith Mentzer, “… we had to save to go on a weekend camping trip. My wife has been out of work for over 2 years, the emotional wear and tear has been the hardest … “
Those who can, should spend
Of course some households were not hit has hard by the recession and the slowest recovery on record. However, at least initially, Phillips said, those households also “cut back” on spending. That sympathetic frugality didn’t help matters when the economy is so tied to consumer spending.
“We don’t want people to feel like they can’t spend because their neighbors are struggling,” he said. “We need that spending to drive the economy.”
- Loren Suncloud Henry: “I bike everywhere now…”
- Kim Izenman: “… we have watched our retirement investments shrink to the point that we will have to work longer than we had planned.”
- Leslie Ann Rose: “My partner is 64 and unemployed. … He is also sans medical benefits because we cannot afford it. In nine months he will be eligible for Medicare (if it is still there). Between now and then, we hope he will remain healthy.”
- Barbara Placek: “Our 26-year-old son graduated from university over two years ago. No job, although he looks every day. Thankfully, we have a home where he can live with us.”
What can you do?
Don’t focus on the immediate turmoil. Take the long view.
“It is really a bad idea to sit there and constantly check the financial news,” Phillips said.