Really starting to worry about the ecomomy

[Ohio12]

Have we talked about this already? I feel like I am the only person I know that is THIS worried about the economy. The expert economists on the news, Charlie Rose, NPR are out there screaming that this is a "depression" level crises. Is anyone doing anything (personally) to prepare for this? I don't want to sound like a wacko, but I am thinking of starting to keep my money under the bed! I was up last night worrying about it.

 

(To be honest, probably half my worry is rage that this is happening...DH and I have worked so hard to stay out of debt and save just a little money each year and I feel like we are paying for the bad decisions of others)

[Tracy in Ky]

Is anyone doing anything (personally) to prepare for this?

 

I've been concerned about the economy for months now.

 

Our main focus personally is on food production. It is hard to do a whole lot when the economy is so tight.

[hsmamainva]

According to my husband, who has a degree in Economics, what the federal government did yesterday was done to prevent a Great Depression and he says that, while we'll be paying for this one for awhile, it was a good decision.

 

I'd often told him that I was worried that we were headed for another Great Depression and he always told me that it would never happen - that the Federal Government wouldn't allow it to happen. And they didn't. That's what this is all about. (If you listen to most economomists - Suze Orman, that Mad Money guy; I forgot his name!, or my hubby - they're glad to see the Feds step in)

 

It should stop the cascade of foreclosures and, if the housing market ever turns around, the government should make a killing off of this deal (which they would then use to pay down what it's going to cost us right now to fix it).

 

What my hubby does want is more regulation, so this doesn't happen again. He said that McCain was one of the champions of de-regulation for all of these agencies -- maybe he's learned a valuable lesson...one he needs to learn if he should win the White House.

[Renee in NC]

I agree with Kelly's husband.;)

 

I was almost sick over the resolution, though. The only way to actually PAY for all of these bailouts and the deficit already incurred is to raise taxes and cut services.

 

I believe that while we may have avoided another "Great Depression" we are sliding (quickly) toward the problems that Japan has had for 15+ years - almost stagnant growth. Stagnation and continued inflation will not be pretty.

 

We will ALL be feeling this for a long time to come. I do think that some things we have taken for granted will no longer be the norm and that alot of "luxury" businesses will go out of business.

[hsmamainva]

You're so right, Drama Queen!!

 

This will definitely cause many folks to re-examine their priorities!

 

But I can tell you that my hubby was really a worried man on Thursday!! He told me that the entire US economy was on the verge of collapse - literally. And that would have caused a domino effect that we'd likely never recover from.

 

Now we need to do some major belt-tightening.

[8filltheheart]

Neil Cavuto is having a 2 hr special on this from 10-12 today on Fox. I have watched his show for yrs and I respect his economic analyses. I will be watching today b/c I want to hear his perspective.

[Nestof3]

He said that McCain was one of the champions of de-regulation for all of these agencies

 

I thought I heard Bill Clinton was.

[hsmamainva]

Here's an article from our local paper (The Washington Post) about John McCain's role in deregulation.

 

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/16/AR2008091603732.html?hpid=topnews

[Renee in NC]

I thought I heard Bill Clinton was.

 

Actually, it was Clinton and a republican Congress. There is PLENTY of blame to go around.;)

[Ohio12]

Last night on Bill Moyers, I thought that Gretchen Morgenson (NY Times) had a good point. They deregulated in good times and now they are "regulating" in bad times by bailing them out. You have to either be 100% out or 100% in. Otherwise they companies will be irresponsible and expect bailouts, which is exactly what happened.

 

Why do these companies think they can hand out HUGE salaries and bonuses and then declare bankruptcy. DH and I really sacrifice in order to stay out of debt and try to save a little. When our peers went to Florida for Spring Break last year, we were freezing out butts off up here in Ohio.

 

What would it take for these companies to decide to live within their means?

[Renee in NC]

You're so right, Drama Queen!!

 

This will definitely cause many folks to re-examine their priorities!

 

But I can tell you that my hubby was really a worried man on Thursday!! He told me that the entire US economy was on the verge of collapse - literally. And that would have caused a domino effect that we'd likely never recover from.

 

Now we need to do some major belt-tightening.

 

Our economy was not the only one headed for catastrophe - the international markets are so intertwined we were bringing a few other big players down with us.

[TXMomof4]

Have we talked about this already? I feel like I am the only person I know that is THIS worried about the economy. The expert economists on the news, Charlie Rose, NPR are out there screaming that this is a "depression" level crises. Is anyone doing anything (personally) to prepare for this? I don't want to sound like a wacko, but I am thinking of starting to keep my money under the bed! I was up last night worrying about it.

 

(To be honest, probably half my worry is rage that this is happening...DH and I have worked so hard to stay out of debt and save just a little money each year and I feel like we are paying for the bad decisions of others)

 

Dave Ramsey said yesterday that it's fine. He said the banks are fine, your mutual fund is fine. I'm not an economic person, but I trust Dave and I'm not pulling my money out.....yet.

 

As far as what to do, I'm just making sure every one of our debts is paid. We are living 100% on cash now, we don't own our home, I have one car loan that will be paid off by the end of the year and student loans. (Did I mention that I hate student loans?) I'm setting more from each paycheck into savings so that there's a cushion and then, I'm not going to worry.

[Nestof3]

What would it take for these companies to decide to live within their means?

 

Individuals have the same problems. I know there are people who are barely making it, but I personally know people who are living beyond their means because of their lust and oddly enough, because they believe they are following God's vision for the promised land.

 

The economy is one of the reasons we have chosen to remain in tight living quarters. We actually had one child of a family we know make the comment (remember, they live in a $4,00o sq ft house):

 

"Your house is like a little apartment."

 

So, yes, our house is smaller than anyone we know in real life. Yes, we have to store toilet paper in our boys' wardrobe. But, it will be paid for if things continue well in three years. And, our mortgage is low so that we're not living right on the edge.

[hsmamainva]

Dave Ramsey is right and, one of the things the Feds did on Friday is to insure your money market account (which is huge!). It's now insured, just like your bank account.

 

My hubby has never allowed us to have credit card debt -- his economics degree has been very useful in that respect!

 

We have a mortgage and one car payment and that's the extent of our debt.

[Parrothead]

 

What would it take for these companies to decide to live within their means?

It would take the economy's total failure for this to happen. Basically the mindset comes from the way the companies were raised. I know that sounds funny, but it is true. The people in charge think it is okay to charge, get in debt, make customers get into debt, etc. How many generations have found credit to be a good thing. It is a vicious cycle that won't be broken any time soon. Especially now they the gov't has bailed them out. They haven't learned the hard lessons.

[Renee in NC]

It would take the economy's total failure for this to happen. Basically the mindset comes from the way the companies were raised. I know that sounds funny, but it is true. The people in charge think it is okay to charge, get in debt, make customers get into debt, etc. How many generations have found credit to be a good thing. It is a vicious cycle that won't be broken any time soon. Especially now they the gov't has bailed them out. They haven't learned the hard lessons.

 

 

My hope is that there are strings attached to this bailout - the regulation needs to be re-instated and limits set on many, many things. Banks can always "opt out", right?:D

[Tracy in Ky]

 

The economy is one of the reasons we have chosen to remain in tight living quarters. We actually had one child of a family we know make the comment (remember, they live in a $4,00o sq ft house):

 

"Your house is like a little apartment."

 

So, yes, our house is smaller than anyone we know in real life. Yes, we have to store toilet paper in our boys' wardrobe. But, it will be paid for if things continue well in three years. And, our morgage is low so that we're not living right on the edge.

 

You are very wise.

[Nestof3]

We have a mortgage and one car payment and that's the extent of our debt.

 

That's us, and now that we are out of credit card debt, we can pay extra on the van, and when that's paid off, extra on the house. We had been paying extra on the house until the van which was bought one year ago.

 

We don't feel bad about the van, because our last one was bought with cash. but we had to put so much into it and repairs we crazy. We finally decided we'd buy a new vehicle which will last at least 15 years, possible 20. We put a huge down payment on it, and already owe in one year, just a little more than half. Because our mortgage is so low, we could do this. Honda's also do not depreciate as much as other brands.

[hsmamainva]

I hope it changes alot of mindsets!!

 

We've bought 3 homes during our marriage and, every time, we needed 10% down and excellent credit. We would never agree to a "no money down, look at this low interest rate for 2 years!" sales pitch -- but many, many folks did accept it.

 

So the mindset of the everyday American needs to change as much as the corporate mindset does.

[Parrothead]

My hope is that there are strings attached to this bailout - the regulation needs to be re-instated and limits set on many, many things. Banks can always "opt out", right?:D

That would be a good thing. I haven't heard if there are any though.

 

As to the worry, I'm not worried quite yet. Concerned, yes, but not worried. The economy cycles. I'm hoping the upswing will start within the next year or so.

[Ohio12]

Dave Ramsey said yesterday that it's fine. He said the banks are fine, your mutual fund is fine. I'm not an economic person, but I trust Dave and I'm not pulling my money out.....yet.

 

As far as what to do, I'm just making sure every one of our debts is paid. We are living 100% on cash now, we don't own our home, I have one car loan that will be paid off by the end of the year and student loans. (Did I mention that I hate student loans?) I'm setting more from each paycheck into savings so that there's a cushion and then, I'm not going to worry.

 

 

I hate to say it, but if "depression" levels are coming, I am not sure we should pay down debt right now! Wouldn't it be better to pay minimums and stash the cash somewhere safe? Having a second car or a credit card paid off is not going to help us if the banks fail and we can't access any of our money.

[hsmamainva]

Depression is NOT coming. That's what Friday's move by the Feds prevented. The last thing the American economy needs is a run on the banks and everyone pulling their money out. Live within your means is the best advice.

[Ohio12]

Depression is NOT coming. That's what Friday's move by the Feds prevented. The last thing the American economy needs is a run on the banks and everyone pulling their money out. Live within your means is the best advice.

 

 

I know you are probably right, but I don't trust the government to educate my kids, provide me with health care, keep our borders safe, not drag us into a dumb war or not waste my money so I am not sure I trust them to insure my mutual funds or my bank.

[hsmamainva]

I know you are probably right, but I don't trust the government to educate my kids, provide me with health care, keep our borders safe, not drag us into a dumb war or not waste my money so I am not sure I trust them to insure my mutual funds or my bank.

 

LOL! No argument there! ;)

 

If you really, really want to live independently, then look into homesteading. Some friends of ours had the same mindset. They bought 20 acres of land in West Virginia for next to nothing back in the early 90's. They saved their money -- I mean scraped together every dime...had their kids recycling cans, etc. -- paid off all of their debt. They built their own house on that land, bought farm animals, and planted a *huge* garden, quit their jobs, and they're the most self-sufficient people I know. They basically 'disappeared from society'.

 

It's more radical than *I* could handle, but they truly aren't dependent on the government for anything. The entire economy could collapse and they wouldn't have a clue (they don't own a TV, subscribe to a newspaper, or even have internet access -- I hear about their adventures via letters in the mail)

 

I was a late baby, btw, so my parents (who are now deceased) grew up during the Great Depression. My mother had a terrible time (her father was a car salesman and they lived very 'high on the hog' during the 20's, and he lost everything -- so they were in the lines at the soup kitchens just to survive. Her father was soon selling oranges to make ends meet). Now my father lived on a farm and he said that they really didn't have it bad at all. He used to say that he was just as poor during the Depression as he was before the Depression and after the Depression. They always had food and, if they needed anything else, they could exchange their food for what they needed.

 

And I've never forgotten that difference between my parents' childhoods, so we've always had a garden -- I grew up with a garden (my father insisted, which makes sense, considering what he grew up with), and my mother washed and saved Reynolds' Wrap and plastic bags until the day she died).

 

We've forgotten that way of living in this 'I want it now and then I'll throw it away when I'm done with it' modern society.

[Nestof3]

I hate to say it, but if "depression" levels are coming, I am not sure we should pay down debt right now!

 

I hear what you're saying. I guess we are looking more long term -- the fewer debts, the less money we will need. We believe in quick debt payoff because we are Christians as well. We feel an obligation as we are exhorted in Proverbs to and reminded that a borrower is slave/servant to the lender. We want to be free from the financial bondage as quickly as possible. We also feel that the companies that loan us money are made of real people who deserve to be paid for their service. We look at companies as comprised of real people with families and the owners people who have made it possible to eventually own a house by giving loans.

 

Paul also exhorted us to "owe no man" anything but love. Now, it is a little difficult these days to have no debt unless you choose to rent, but I do feel we should pay it quickly.

 

Here is a great reference on money matters for Christians (wisdom for others in there too) :)

http://www.christianpf.com/money-in-the-bible/

[Nestof3]

Kelly,

 

I think of the benefits of being self-sufficient as well, but the reality is, if a true economic collapse were to happen, I wonder how long it would take for others to steal what they spent so much time storing away. Am I a pessimist? ;)

[Sara R]

The real problem is, where is all of this money coming from? Even before this year's financial crisis, our country was already in more debt than we could ever conceivably pay off. Google David Walker (former GAO head) 60 Minutes. Baby boomers are retiring and Medicaid gets way more expensive each year.

 

So with all of this additional debt, the only way to pay it off is (1) massive tax increases (but I don't think even that would be enough at this point), or (2) massive inflation (Weimar Germany--that's what they did when they had more debt than they could ever hope to pay off). We haven't seen anything yet.

[hsmamainva]

Kelly,

 

I think of the benefits of being self-sufficient as well, but the reality is, if a true economic collapse were to happen, I wonder how long it would take for others to steal what they spent so much time storing away. Am I a pessimist? ;)

 

Nope! It makes you a realist! :)

 

My hubby and I were discussing this just last night. The difference between a Great Depression back then and a Great Depression now is just huge!!! Back in the 1930's, I believe some 30-40% of folks lived on farms, so they could at least survive.

 

I believe only some 2% of Americans (and that seems high to me) live on farms today. I don't know how people would find enough food to feed their families. I mean, we get 3" of snow in our area and you can't find milk anywhere in town! It wouldn't take much to set everyone in a panic, and then they WOULD be coming after what you have.

 

That's why the Fed's action was so necessary. The American lifestyle has changed dramatically since the 30's.

[ma23peas]

I have never worried about the economy, I don't listen to all those screaming foul at the street corners..(meaning all the news folks trying to make news because their ratings are in the tank...nothing raises ratings more than making people think they really need to worry about something)

 

Why don't I listen? Well, my grandparents lived through the depression, when you talk to them about it, they say, "We never really knew there was a depression...we lived in rural areas where life was always hard, they were sharecroppers, they labored hard in the fields all day and no matter what was happening in the 'financial districts'...they just kept plugging away." That's the way it was in the 70's...my parents had to sell their dream home for less than it cost to build and rented a home for 15 years because the mortgage rates were in the teens and not feasible to buy...but did that 'really' affect me? No, I had a family that loved each other and worked hard...I still have that..I'm content to handle what's given to me and keep living..sure, I put away savings as we can manage it, but if it all disappeared with some financial fallout, would I worry..not really..I have the complete faith that someone else is in control and He's never failed me yet...we always have what we need and accept the challenge of tough times with joy...we've had 2 house payments for 16 months..would I have thought we could afford 2 house payments for this long? NO WAY! But, somehow it's there (dh has worked 2 jobs that are still there)....

 

I just don't worry...what will it do for you?

 

Tara

[laylamcb]

It should stop the cascade of foreclosures and, if the housing market ever turns around, the government should make a killing off of this deal (which they would then use to pay down what it's going to cost us right now to fix it).

 

 

 

This is an important point that is getting overlooked. What we call a bailout is actually a massive loan. So the government should be getting a tidy sum of interest in return for shoring up these companies.... And yes, let's just hope that "stagflation" doesn't set in. Anyone remember the gas lines in the 70s? :001_huh:

 

Having said that, I agree with most all of what you all have been saying: I don't put a great deal of faith in the government to fix things in such a way that they stay fixed. I hate that these corporate fat cats get the bailout and get to keep their massive bonuses. I think that, in general, we Americans have become voracious (and seemingly insatiable) consumers rather than prodigious accumulators of wealth. Get a raise? Great! Now you can buy a flat screen TV! Get a BIG raise? Buy a boat! There just isn't a whole lot of focus on the real cost of these items, unfortunately.

 

We live like most of you do: No debt except our house, two older model cars, one archaic TV in the basement. Each year we give away 10-12% of our gross income, save 10-15% for retirement, save whatever we can for college and emergencies (we're not so great on these shorter term goals), and live off the rest. It isn't easy, but it's certainly doable--if you keep your eyes on the end zone and don't get distracted by all the noise and bells and whistles and flashing lights on the sidelines. :001_smile:

[Guest Virginia Dawn]

I haven't read any of the other answers yet, but I want to say you are not the only one.

 

I was worrying so much yesterday that I felt sick.

 

I feel helpless and like I've been wasting my time and money for the last few years, and by most standards we are pretty frugal. I've been wanting to discuss and commiserate with someone, but my dad won't pick up his phone.

 

Dh says, "We can't do anything about it but keep paying our bills and meeting our needs the best we can." He doesn't seem worried, but I know he is frustrated because all this could have been foreseen.

 

I just want to DO something. So I went out and hoed and weeded and planted kale and carrots, next week peas and garlic. We've never had a fall garden before. It makes me feel better to think that it might help in a small way.

[mcconnellboys]

Well, I wouldn't make it paper money, LOL - maybe gold bricks in a bank vault.... I think a lot of us are worried. I fully stocked my pantry and freezers in May and have since been able to shop around for sales and better buys for replenishment purposes.

 

We cut and save where we can: reuse what we can; consolidate trips as much as possible; grow and preserve a few things now (even though we're in a city with a small lot); try to follow a budget as much as possible, etc.

[Kathy in MD]

According to my husband, who has a degree in Economics, what the federal government did yesterday was done to prevent a Great Depression and he says that, while we'll be paying for this one for awhile, it was a good decision.

 

I'd often told him that I was worried that we were headed for another Great Depression and he always told me that it would never happen - that the Federal Government wouldn't allow it to happen. And they didn't. That's what this is all about. (If you listen to most economomists - Suze Orman, that Mad Money guy; I forgot his name!, or my hubby - they're glad to see the Feds step in)

 

It should stop the cascade of foreclosures and, if the housing market ever turns around, the government should make a killing off of this deal (which they would then use to pay down what it's going to cost us right now to fix it).

 

What my hubby does want is more regulation, so this doesn't happen again. He said that McCain was one of the champions of de-regulation for all of these agencies -- maybe he's learned a valuable lesson...one he needs to learn if he should win the White House.

 

I also concur. For a couple of decades I've been railing about individuals who forget the lessons of history and want no regulation. There were good, human nature based reasons for regulating industry -- greed of course comes immediately to mind. The fact that we don't live in total isolation, unaffected by our neighbors' actions is another.

 

There always will be the struggle between regulation and no regulation, and we should have that struggle to make sure that regulations make sense. But some degree of good regulation will always be needed. For our economy and society to exist, trust in the system is needed and regulations help maintain that trust.

[Ohio12]

I haven't read any of the other answers yet, but I want to say you are not the only one.

 

I was worrying so much yesterday that I felt sick.

 

I feel helpless and like I've been wasting my time and money for the last few years, and by most standards we are pretty frugal. I've been wanting to discuss and commiserate with someone, but my dad won't pick up his phone.

 

Dh says, "We can't do anything about it but keep paying our bills and meeting our needs the best we can." He doesn't seem worried, but I know he is frustrated because all this could have been foreseen.

 

I just want to DO something. So I went out and hoed and weeded and planted kale and carrots, next week peas and garlic. We've never had a fall garden before. It makes me feel better to think that it might help in a small way.

 

Glad I am not the only one..and I see the wisdom in what your DH is saying. But what if I have say 5K saved up. Should I invest it while things are low, put it in savings in the bank, put it under my bed, buy gold with it or spend it while it is worth something? What if I have 15K saved?

[Kathy in MD]

I have never worried about the economy, I don't listen to all those screaming foul at the street corners..(meaning all the news folks trying to make news because their ratings are in the tank...nothing raises ratings more than making people think they really need to worry about something)

 

Why don't I listen? Well, my grandparents lived through the depression, when you talk to them about it, they say, "We never really knew there was a depression...we lived in rural areas where life was always hard, they were sharecroppers, they labored hard in the fields all day and no matter what was happening in the 'financial districts'...they just kept plugging away." ........

 

I agree that a lot of screaming is almost always overdone. Sometimes it's to improve ratings, but often it's because panic feeds on panic. Remember FDR's line, "We have nothing to fear but fear itself."?

 

But a depression is something to fear IF you don't have land to farm. Remember even farmers lost their farms during the depression, and had no way to feed their families. In the dust bowl, even if you did have land, you couldn't always feed your family due to crop failure.

 

My parents grew up during the depression. My mother grew up on a farm and had plenty to eat, living in the moister Great Lakes area. But her professional relatives living in the city had to come to my grandparents' farm to get sufficient food. How many urban dwellers today have easy access to relatives able to feed them?

 

Then even if you have access to land to garden in, do you know how to can, pickle and dry your food to ensure a winter food supply? Do you have the supplies to preserve your food? Can you afford the energy to preserve your food? Do you have the land to grow the staples --grains and mature beans? That takes a lot more land than just vegetables.

 

Yes, many came through the Depression without a major drop in their lifestyle, but we have far fewer people on the land than we did then. And our population is about double what it was then. I think you need to be realize that the pictures of NYC soup lines would be far more common in the 2000's than during the '30's if we had a major depression today.

 

I don't see that happening yet, but the country's infrastructure is very different today than it was then. Just because YOUR grandparents didn't suffer much more during the Depression doesn't mean that others didn't then or that they wouldn't today.

[ClassicMom]

Ohio 12,

 

Don't forget, along with MI, we are in two of the hardest hit economic states in the union. We are going to feel the pain of the recent events much more than many of the other states since we were already in an economic crisis already.

 

Dh and I have been out of debt for a couple of years except for our van, home and the never-ending medical bills. We can transfer anywhere and have been looking to move somewhere where the job market is more stable. However, we bought our home (near Toledo) just before the housing market bottomed out. Paid $110 and now we would be lucky if we got $75 for it. Our neighbors across the street paid much more than we did and just sold for $77. It's heart-breaking. You can't even count on your home as equity now.

 

We don't even watch the news anymore. I actually had a panic attack the other night. Before the bailout, I knew a depression was coming and knew there wasn't anything I could do about it. I was glad that the government stepped-in. However, our paper money cannot be worth much. What is backing it up?

[Sharon in SC]

...we've had 2 house payments for 16 months..would I have thought we could afford 2 house payments for this long? NO WAY! But, somehow it's there

I just don't worry...what will it do for you?

 

Tara

 

I'm right there with you, Tara. We've carried (and continue to do so) two homes, unexpectedly, for 24 months and counting. I could not have imagined being able to do so but God has provided. The verse of the day for me is: The Lord is my strength and my shield; my heart trusts in Him, and I am helped. My heart leaps for joy and I will give thanks to him in song." Psa 28:7

 

Thanks for sharing,

sharon

[Storm Bay]

Well, if you want to do something to help the economy, buy made in USA from American owned companies. Regardless of what politicians and the media says, one of the factors involved in our poor economy is the global economy that takes manufacturing jobs out of the country and leaves people without jobs. They then usually have to find service jobs instead, usually for about half the wages. Not to mention the lost tax revenue, etc. It would be simplistic to say that that's the only cause, because it's not, but it's one big problem.

[Jane in NC]

Gretchen Morgensen of the New York Times hits a homerun, in my opinion! In today's column she expounds on the theme: "They break it. We own it."

 

Treasury Secretary Paulson calls the bailouts the "troubled asset relief program" which Morgensen shortens to "TARP", referring to taxpayers as the "TARPistas" who will pay the price for this mess. The lack of transparency is worth noting--Morgenson comments that we're having the TARP pulled over our eyes.

 

Clever comments aside, it is a good read.

 

Jane

[ClassicMom]

Well, if you want to do something to help the economy, buy made in USA from American owned companies. Regardless of what politicians and the media says, one of the factors involved in our poor economy is the global economy that takes manufacturing jobs out of the country and leaves people without jobs. They then usually have to find service jobs instead, usually for about half the wages. Not to mention the lost tax revenue, etc. It would be simplistic to say that that's the only cause, because it's not, but it's one big problem.

 

:iagree::iagree:

[Only me]

I'm sure many of us (myself included) don't live on a farm or know anyone who does. We have a pretty big mortgage on our house (200K) which really isn't much for this area but of course it is a lot of money. We also have two car loans. We don't buy a ton on credit but do have a few credit cards with balances. Yes, we owe a lot of money but we didn't buy more house than we could afford and we didn't have a lot of choices living in this area. At the time we bought the house and cars my dh was making more than enough money to cover our mortgage and car payments. He still is but I'm worried about what would happen if he lost his job.

 

So what kinds of things are you all doing? Are you stocking up on cash or food? We're trying to cut down on expenses and paying off our debt but I don't know what other steps we should be taking. I would really like to try to start shopping and cooking smarter (less junk food, etc.) but I really don't know where to begin.

[moreschool]

" . . . . . .but we didn't buy more house than we could afford and we didn't have a lot of choices living in this area. . . . . ."

 

 

You were more than wise in not over spending on a home. Unfortunately,

too many of today's home owners have lived under the delusion that overspending for a home is a road to riches. They forgot that the added interest paid over the years, moving expenses, mortgage closing expenses and real estate commission expenses were a hugh and costly burden. In many instances the bread winner has had to forgo opportunities in job selection, handling two jobs, all in the hopes of building an equity that can easily be erased as we are witnessing today. Stress can damage your family life over the thirty year life span of a mortgage. People forget that interest, especially excess interest paid out over thirty years must be considered a true expense against the equity you have earned, if today's real estate downturn has not caused you excessive financial harm.

 

If you own a home today that is worth two times what you paid for it ten to fifteen years ago you have come out ahead if your equity in that home is more than fifty percent percent, but if it isn't you made a poor investment decision because your cost of living is two times as high as ten to fifteen years ago while you were paying through the nose in housing costs especially if those expensese were beyond your means. Just be thankful you didn't rent or buy over your head or faced the misfortune of double mortgage payments and home upkeep as some of you have related.

 

Times have been great for good real estate and mortgage brokers, but they to are suffering today where there was excessive greed. What goes around, comes around.

[Peela]

I dont think there is any point worrying, but it's worth thinking about "worst case scenario" and just discussing things with your dh. I am in Australia- I am discussing it with my dh, and I have even had a conversation with my kids this week that in their lives, things may not always be as prosperous and secure as they see now- I am preparing them for possible upheaval so its not a shock if it comes. We are probably protected somewhat due to our growing economic ties with China and our local mining boom, but still, most of the western world is being, and will be, strongly affected by a collapse of the U.S. economy. I am reading everything I can get my hands on, and my dh has understandings that i dont simply because he has lived 14 years longer than me and used to be a business man, so talking to him is helping me.

Worry doesn't help anyone. And it doesn't make you think clearly. We don't and can't know the future, but we can discuss with each other what we might do if such and such were to happen.

Personally, to me, it's not looking good for the U.S. and therefore there will be fallout throughout the world. It seems to be the bailout can only be a temporary measure. But, I dont know and am no economics expert- although I am now making it my job to learn.

I am not sure that there arent even people at the top who knew this was coming and will use the opportunity to take away more rights and centralise more power.

Worry is fear, and fear is not going to help- it will send us in the wrong direction. Making decisions from fear is not wise. We need clear minds and strong hearts. The truth is the system is unbalanced and unsustainable and we may be the generation that lives through some rebalancing- and that is a good thing for future generations. So it's not all bad, but for us personally, it may be hard.

[Jean too]

Actually McCain tried to stop the insanity in 2005.

 

 

http://hotair.com/archives/2008/09/17/mccains-attempt-to-fix-fannie-mae-freddie-mac-in-2005/

[Sharon in SC]

Actually McCain tried to stop the insanity in 2005.

 

 

http://hotair.com/archives/2008/09/17/mccains-attempt-to-fix-fannie-mae-freddie-mac-in-2005/

 

Yes, as did Bush at another very distinct point in time.

[lynn]

According to my husband, who has a degree in Economics, what the federal government did yesterday was done to prevent a Great Depression and he says that, while we'll be paying for this one for awhile, it was a good decision.

 

I'd often told him that I was worried that we were headed for another Great Depression and he always told me that it would never happen - that the Federal Government wouldn't allow it to happen. And they didn't. That's what this is all about. (If you listen to most economomists - Suze Orman, that Mad Money guy; I forgot his name!, or my hubby - they're glad to see the Feds step in)

 

It should stop the cascade of foreclosures and, if the housing market ever turns around, the government should make a killing off of this deal (which they would then use to pay down what it's going to cost us right now to fix it).

 

What my hubby does want is more regulation, so this doesn't happen again. He said that McCain was one of the champions of de-regulation for all of these agencies -- maybe he's learned a valuable lesson...one he needs to learn if he should win the White House.

 

Depression is NOT coming. That's what Friday's move by the Feds prevented. The last thing the American economy needs is a run on the banks and everyone pulling their money out. Live within your means is the best advice.

 

I had to laugh when I read the last line. Can we convince everyone else do live within their means? We live well within our means and continually are amazed at the things many can not afford but just have to have at any cost. I have been wondering if the suicide rate will go up as we become more of a cash vs a credit card society and people can not get instant gratification like they have been use to.

[Jane in NC]

As I read the news, it appears that the power of 700 billion dollars rests in one man's hands, Secretary Paulson. Yikes! Where is the oversight? If lack of transparency contributed to the problem (as I believe it did), then where is the transparency of the solution?

 

Am I being overly paranoid? I read that the top five executives at Goldman Sachs were paid 322 million in bonuses last year. (Article here.) If Goldman Sachs turns to the feds for money, how do we know where it is going? (I realize that 322 million is a drop in the bucket--ahem--but really!)

 

The more I think about this business, the more irritated I get.

 

Pfui.

Jane

[Prairie~Phlox]

It is what it is. There is no sense worrying, worry does not change things nor is it good.

 

Phlox

[Jennifer3141]

The economics in the US and particularly Michigan have hit our family hard.

 

My parents lost their business. They created it 38 years ago.

They would have lost their house had my DH not stepped in and taken over their payments. They lost a lot as it is. :(

 

And as much as I adore my parents they fell for the, "Credit is everything!" party. DH and I did not. They have one of those ridiculous houses and DH and I chose to live more simply before this all happened. Because we made a smart choice, we were there to bail my parents out.

 

Our total credit card debt is about $1500, an amount I could pay off at anytime. We own both cars and although they are getting up there in age, they both work.

 

DH drives a 2000 Focus to work and parks it right next to all the Lexuses and Benzes and gets some teasing. But we don't have car payments and cheap car insurance so we can go out to eat more! :D

I drive a Jeep that's paid off.

 

We've decided not to buy the house we are renting, but the owner is so nice and so desperate for someone to care for this place that we've got a very nice lease and a guarantee that we can stay here for 10 years or more. We do own a small condo in our hometown and we're going to keep that because it's almost paid off and it's in a good location if we need to move back south - it's near everything I like to do.

 

So we're making THREE house payments right now.

 

I don't have my garden in yet but I will.

 

Although it's obviously hard on DH and I every month, we're grateful for the lesson. We will NEVER go where so many Americans have gone and we'll all endure this somehow. The people I don't get are the ones who don't seem to actually SEE what's going on around them. I know people who are blowing money on THIRD homes for fun, right now even though they don't really have the money. And I run with wives who insist that their DH buy them a new car every year. It cracks me up that some people haven't slowed down and evaluated their lives a bit more because of this. I fear for them.

 

Jen

[lynn]

The economics in the US and particularly Michigan have hit our family hard.

 

My parents lost their business. They created it 38 years ago.

They would have lost their house had my DH not stepped in and taken over their payments. They lost a lot as it is. :(

 

And as much as I adore my parents they fell for the, "Credit is everything!" party. DH and I did not. They have one of those ridiculous houses and DH and I chose to live more simply before this all happened. Because we made a smart choice, we were there to bail my parents out.

 

Our total credit card debt is about $1500, an amount I could pay off at anytime. We own both cars and although they are getting up there in age, they both work.

 

DH drives a 2000 Focus to work and parks it right next to all the Lexuses and Benzes and gets some teasing. But we don't have car payments and cheap car insurance so we can go out to eat more! :D

I drive a Jeep that's paid off.

 

We've decided not to buy the house we are renting, but the owner is so nice and so desperate for someone to care for this place that we've got a very nice lease and a guarantee that we can stay here for 10 years or more. We do own a small condo in our hometown and we're going to keep that because it's almost paid off and it's in a good location if we need to move back south - it's near everything I like to do.

 

So we're making THREE house payments right now.

 

I don't have my garden in yet but I will.

 

Although it's obviously hard on DH and I every month, we're grateful for the lesson. We will NEVER go where so many Americans have gone and we'll all endure this somehow. The people I don't get are the ones who don't seem to actually SEE what's going on around them. I know people who are blowing money on THIRD homes for fun, right now even though they don't really have the money. And I run with wives who insist that their DH buy them a new car every year. It cracks me up that some people haven't slowed down and evaluated their lives a bit more because of this. I fear for them.

 

Jen

 

It is quite amazing how oblivious people seem to be. We have a nice open shopping area in town and I like to grab a starbucks and window shop by myself from time to time and last week as the stock market was on it's way down people were loaded down with their shopping bags. These are all high end stores i.e. anthropology, chico, ann taylor etc. We have 2 paid off vehicles a 97T100 and a 2000 sienna and you know the way things are going it feel pretty good knowing we can sleep at night because we don't ahve to worry about making payments or how we are going to pay the mortgage each month.