Do you agree with the media that the American Economy is in TERRIBLE SHAPE? (bankruptcy, loans)

[Oregon Transplant]

Every time I turn on the TV or look at the news on the Internet, I am constantly reminded that the American Economy is in terrible shape. Words like recession, economic downturn, depression, unemployment, inflation, etc. are constantly being used.

But if I did not follow the news it would seem like we are doing fine. The Malls are jammed with shoppers, all my friends and relatives are working and getting raises and promotions, restaurants are jammed and traffic is still heavy at rush hour.

If you did not watch the news would you notice this terrible economy in your day to day life?

[bls5555]

Originally Posted by Oregon Transplant

If you did not watch the news would you notice this terrible economy in your day to day life?

No

[DasNootz]

The band also played as the Titanic sank....

I think it's hard not fear the long-term impact of our nation's ever-growing debt.

[downtownnola]

I think that the media has blown this recession way out of proportion. If the media did not report on it, relatively few people would likely even know we were in a recession.

I was at the mall this past Saturday and it was so jam packed that I could barely find a parking space... maybe people are starting their Christmas shopping early this year!

The media keeps talking about the "housing crisis," even though the current foreclosure rate is only about 2%... my friends, relatives and co-workers seem to be doing fine. I don't know anyone who is in bankruptcy. Later on this week, I am getting a review at my job for a raise. I choose to think for myself rather than listen to the media. I don't think that things are nearly as bad as they would have us to beleive.

[Donn2390]

We used to get the news a couple of times a day, now news is broadcast 12+ hours a day, and 90% of it is useless filler. Bad news sells better than good news.
The sky is not falling, I, too, see the malls full. Some people are going through bad times. The biggest percentages aren't.

[Mircea]

Originally Posted by Oregon Transplant

Every time I turn on the TV or look at the news on the Internet, I am constantly reminded that the American Economy is in terrible shape. Words like recession, economic downturn, depression, unemployment, inflation, etc. are constantly being used.

But if I did not follow the news it would seem like we are doing fine. The Malls are jammed with shoppers, all my friends and relatives are working and getting raises and promotions, restaurants are jammed and traffic is still heavy at rush hour.

If you did not watch the news would you notice this terrible economy in your day to day life?

Yes, but I don't base my opinion on a media that is not independent, which pushes an agenda and which provides a platform for others to push agendas. It is not a reliable source of information.

I don't base my opinion on the stock market either, as it is not a measure of the health of the economy.

Likewise, observing your local surroundings is not a good way to measure the health of the economy. Some places in the US were unaffected by the recession of 1928 and subsequent bank failures and depression until much later 1935 or later.

Economic growth in the US has been slowly declining. There's no doubt they lied about the numbers for the 1st Quarter 2008, but even so, the economy still had positive growth, although very little. The preliminary numbers for the 2nd Quarter will not be released for another week, and those numbers will probably be fudged too, because the party political conventions follow on.

The US economy is in terrible shape in part because of future expenditures that must be made and limited sources of revenues for those expenditures. Unless the US economy starts growing at a rate of 8% to 10% per year, it ain't gonna happen.

[AustinGuy]

I'm curious as to where the major job losses are? Back in 2000 in the bay area, almost everyone I knew was either getting laid off or had friends who were getting laid off. Can't say that I know of anything like that happening yet.

It could still come, but we aren't there yet.

[sergeyn]

When we were returning from our vacation last weekend and it was time to stop, we couldn't find a room in a decent hotel as they were all full. The only place that'd take us was a Super 8 with paper thin walls and funny smells and even that charged $100 and took over an hour to find.

The funny thing was that I actually bought somewhat into media's declarations about "consumers tightening their belts" and such-- that's why I didn't bother with reservations, I thought hotels would have vacancies because "the American consumer is squeezed to the limit" and "does without". Duh...

...My big project in personal development right now is to disassociate myself from the news. News industry is an anxiety generator. Most of what it talks about has little to do with you or me.

[HappyTexan]

Well I don't think you see it in your day to day yet but banks and brokerages are borrowing billions per week from the Fed to keep their liquidity. Sooner or later it will hit us. It will take a while though since we are at the bottom.

[Nor'Eastah]

Recessions don't just happen overnight. Back when the stock market crashed in 1929, it wasn't till 1931-32 that people began to realize that there was a problem. It takes from 12 to 18 months for a financial event to affect life for the average person. By the way, I do not watch TV - all my news comes from the internet, mostly from foreign sources, as domestic media are censored.

That said, something has definitely happened, continues to happen, and will keep happening until it's over with. That something is a credit crisis. Lenders got awfully greedy several years ago, and decided to securitize debt - not just mortgages, but auto loans, school loans, even credit cards. Investors bought these securities with the expectation of making profits. Some of the 'investors' were retirement funds, and these losses won't be realized for many years ahead.

A house does not have to be in foreclosure for the payments to become late, or stop altogether. Many 'homeowners' are still living in their houses 12 months after their last payments. As for bankruptcy, most people with outstanding debts do not bother to file for bankruptcy. But they are not paying their bills, either!

I have made it a point to question realtors about the housing market, and from the horse's mouth I hear that even people with good credit have problems securing a mortgage. Banks simply don't have the money to lend. The FDIC refuses to release the names of the banks on their watch list; IndyMac wasn't even on it, so that gives you some idea of the scope of the problem. As for the construction industry, I know for a fact that many, many construction workers are no longer working in that field. Some of them are not working at all, having no other skills.

I'm not trying to preach doom and gloom here. Right now, the average person's life has not been touched by the credit crisis. It will be. I don't know when. It may end up not being such a big deal. Then again, lots of people could end up being hurt by this. Oil prices are not helping, nor are the deficits on the federal, state, municipal, or corporate levels. We are awash in a sea of debt. Most of it will be unpayable. If you have not seen any of this affecting those around you, perhaps you have not been looking for it. Take a good look!