An Economic Crash - Is It Really Bad?

Yes, an economic crash leading to what the pessimistic analysts fear - a depression, is bad. None of us want to repeat 1929. Most of us were not even born and so we have experienced a depression only vicariously through a history book or a story.

Some feel the House made a mistake by not approving the bailout bill during round one.

Some fear that the Senate did the wrong thing by approving the 700 billion dollar bailout.

Some fear that the House won’t approve the bill again. Do they even have a choice politically as the election looms?

Some fear that nothing will truly have much of an effect on curtailing the inevitable economic downturn.

Some are watching their life savings in their 401Ks and 403Bs drop by 30%.

Some are saying that this could lead to a third world war.

I don’t have the answers, just opinions and they are not really qualified as I am NOT a financial expert.

However, that being said, there are truths that we can choose to ignore or address. I think America is choosing to ignore a truth through this crisis.

Truth: Consumers have spent too much. Many Americans live completely outside of their means. Many have mortgages they should never have qualified for. Those who could afford a $200,000 house, got a loan for a $400,000 house. Those who should have bought a Honda Fit, leased a Lexus SUV. Those who should have $1000 credit line on their Visa cards have $20,000. On it goes.

Get the picture?

We are spending too much. My impression of the bailout is that we are trying to do everything we can do to keep ourselves from facing this truth. Yes, if the bailout is not approved, we are going to see a correction that could be catastrophic for quite some time.

However, if we continue to try to get credit to “defrost” artificially, are we just buying a little extra time before the imminent collapse? Could the fall be much worse after the bailout money dries up? Will we go down faster and harder?

I don’t know. But I am very concerned.

This crisis affects your family, your job, and your life in so many ways.

If you have not been engaged in what is going on with Wall Street, it is time you start. Your elected officials are making decisions that may affect your standard of living for the rest of your life. These decisions will shape how socialistic we will become as a nation.

The government is ready to plunge deep into Wall Street. Our market will never be the same. Neither Obama or McCain will have the answer. The issue will outlive their presidency.

I am not an alarmist, but we are in unprecedented times in the short 230+ years we have been a country. I sure hope we can bypass politics and make the right decisions.