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The State of The Economy: Don’t Believe What You Hear On TV

By Erik Folgate

Look around you. Does the economy look like it’s struggling? We just had one of the most successful online retail weekends for sales and a great Black Friday turn out. People either have enough money, or they’re still in love with their credit cards. It’s probably a mixture of both. Yeah, I know that you can’t base one week’s worth of retail sales on the health of the economy, but it’s at least a small indicator of how the economy is doing! I am sick of watching and reading all of these people try to convince us that the economy is crumbling. Yes, the housing market sucks right now. But, what else can you expect when it spikes the way that it did from 2003 to 2005? Every market is cyclical, so what comes up, must go down, and level ba ck out to its normal rate of return. Oil is at an all-time high, but that’s not because George Bush is getting kickbacks from Halliburton, and it’s not because global warming is going to kill all of us. It’s because there are nerdy little futures investors out there that keep driving up the “future” price of oil so that they can make money on their investment. Plus, we’re so concerned about saving the world that we won’t approve any new drilling in North America.

So, tell me why the media wants us to believe we’re falling into a recession. What concrete indicators are out there to show that the economy is going down the drain. The unemployment rate is very low, new jobs are being created, retail sales are up, and we’re dealing with the fact that we can’t sell our houses for huge profits and it costs $50 bucks to pay for a tank of gas. Mortgage rates are stil low, the Dow Jones is above 13,000, and flirted with 14,000 for a while. Seriously, if you think I’m an idiot, just prove me wrong. Tell me something that will convince me that I should start stuffing my money under my mattress. Even the War on Terrorism and the war in Iraq is starting to go well. You can tell that things are going well, because there are NO articles about the Middle East anymore. The military and the war used to be the front headlines every single day in the big city newspapers when things weren’t going well, but now it’s like the sound of crickets in the middle of the night. My point is that you can’t let the media shape your opinion about our nation and the economy. You need to gather all of the evidence and make your own decision about it. I just don’t see what these so-called experts see that talk about the ruin of our economy on television and in the newspaper.

What’s your take on it? I really want to know. Try not to bash my ignorance or conservative views, but give me your honest perspective and opinion about the state of our economy.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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Comments

  • Minimum Wage

    Just as there are Two Americas, there are Two Economies.

    Homeowners, riding the crest of a real estate boom and an interest rate trough, refinanced their homes, reduced their mortgage rates, took out equity, and are flush with cash.

    Renters, failing to benefit from either the real estate boom or the interest rate trough, were unable to cash out, and are struggling paycheck to paycheck.

  • author

    Good point, but just because they are renters doesn’t mean they are broke and have to live with living paycheck to paycheck.

  • michelle

    I agree with you, I dont think there is really anything to worry about. If you are smart and dont get in over your head, these changes should not be effecting you. If you purchased a house within your means and took out a mortgage you can handle then there is no reason to panic. The people who cant manage their money or assets well are the ones in trouble and they will always be in trouble because it takes some common sense. By the way I am a renter and in no way broke and living paycheck to paycheck. In fact I am not broke because I did not decide to buy a house even though I wasnt ready just because it was the trendy thing to do, like so many of my peers. I will take many things into consideration as to when is the right time for me and it will not have to do with how the media portrays the market

  • Ethan

    I agree with the post, Erik, and I also happen to agree to a certain extent with your comment about global warming. Being an ecologist (and I hope having a moderately unbiased opinion), we need to be careful about our attitude toward natural resources.
    Because of some deep rooted aspects of our culture that stem from the renascence, we already have a very independent attitude from nature. I think if we don’t do something about our energy consumption we will have to turn to agriculture to provide an incredible amount of our energy.
    I think if this happens we will consider ourselves even more independent from our environment, and I think this could lead to very unwise decisions by the general masses and by policy makers. I also think it could eventually have dramatic influence over the economy.
    Just some thoughts…but I agree the world is not going to end because of global warming.

  • author

    Yeah, I was kind of in a weird mood when I wrote this post. I’m just tired of the media trying to spoon feed us what we are suppoosed to believe about the general health of our country.

  • Minimum Wage

    Your Mileage May Vary, but nationally, median renter income is approx 40% of median homeowner income, and has been falling for decades as a proportion of homeowner income. (As mortgage innovations and lax lending standards have allowed millions of renters to buy homes, the “renters left behind” consist largely of those who live in high-cost areas or have low incomes.)

    Also, 50 percent of renters nationally are paying at least 30% of income for housaaing; in my state, 20% of renters are paying at least half their income for rent.

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