It's no secret that our economy is hurting right now. Some people say recession other's are afraid to use that word. Can the government help your economic woes? Read this article and find out.
It seems that those in the know are reluctant to use the “R” word (recession) to describe the economy. However,
if economic activity is receding, by definition, that is a recession.
Can the government really help? Sometimes yes, and sometimes no.
For many years, the German government did a good job of “managing” its economy. During periods of economic expansion, they taxed away excess profits. During periods of economic contraction, they pumped this money back into the economy. This took the peaks off the highs and the depths out of the lows, making for a more middle of the road economy.
During the great depression, the US government took steps to try to spur the economy. While the president had good intentions, his direction was misguided. Trying to protect the US manufactures, he instituted high import tariffs. He also allowed for business collusion and price fixing. Unfortunately, these good intentions only deepened and lengthened the depression.
What about today? Can the US government, democrat or republican, really manage the economy, as they say they can? Consider that the US economy started based on agriculture, moved to manufacturing, then to information, and now to consumerism. It is the consumer who drives the economy, not the government. Every time the consumer votes by opening up their wallet and spending money with a particular provider of goods or services, the economy moves forward. When the consumer slows consuming, the economy slows in response.
Right now, people are suffering from “Chicken Little” fever, with fears that, indeed, the sky is falling. Are they right? Is 1929 back with us again?
In the early 80’s, all the business news magazines were prognosticating that it was the 50th anniversary of the great depression, and look out folks, cause here it comes again. Well, that news was surely depressing, and no fun at all. On the other hand, I looked outside and the sky was blue, the sun was out, the trees were green and the air was fresh.
I decided I liked that reality better than gloom and doom. I cancelled all my business news magazines that I had faithfully read for many years. This was un-American or something like that, but I felt much better doing it.
As far as this economy goes, it is not the same problems as the great depression. Yes, there are still problems, but it appears that they are getting resolved. Perhaps it is at great expense and cost to the tax payer, but it is one pain, or it is another greater pain.
I have been in business since 1972 and had my own small business since 1988. I started construction on the building in 1986 during a robust economy. By the time I got my doors open in late 1988, the economy had slipped into a recession. My business plan was out the window, my number did not materialize, and my projections were not being met. No one was happy; not the lender and not me. I had to learn very quickly how to cope with a down economy, or face the loss of my business. Fortunately, I was able to survive the downturn, and come out on the other side.
Today, we are celebrating 20 years in business. Ironically, we are in a recession again. The difference between 20 years ago and now is that back then I had no customers and no reputation. Today we have a good customer base and a good reputation. However, I cannot rest on my laurels if I expect to maintain cash flow and happiness. As a consequence, I am again hunkering down and doing what it necessary to maintain during poor times. I want to come out smiling on the other end.
You cannot really depend on the government to solve your economic woes. They do not control the economy, only you do. You are the one who needs to take the steps to succeed, and to survive and prosper. Doing the right things, the right way, at the right time, is what will keep you afloat.
