Economic Rollercoaster

Well, as of now everyone should be clued into the new rebate program that Congress and the White House have thrown together in an effort to stimulate an economy that some are saying is on the brink of recession. The big question of the day seems to be: Is a stack of $600 checks going to fix anything?

Perhaps, but if anything it will be a short term fix and a "warm and fuzzy" feeling that the government is hoping will convince us that everything is alright.

Why? Well, when it comes down to it, the status of our economy is entirely up to us. Perception is reality. For example: At last years State of the Union Address (a year ago), President Bush used the economic success of the US as a huge positive of his administration as he attempted to rally support for the upcoming "surge." We were seeing increasing wages WITHOUT government intervention, 40 months of constant job growth, inflation in check and unemployment at record lows. Overall, people were making money and living happily.

What happened?

Well, the housing market (which was already a bit shaky compared to previous years of prosperity) began to crumble due to overzealous lenders and incompetent borrows. The media constantly reported this negative while continuing to ignore the positives that compiled over several years. Poll's were released often showing that Americans were increasingly pessimistic about our economy (like here, here and here) even though the experts and numbers told a completely different story (like here and here). As a result, we have become weary overtime about our spending and enter a bit of a rough patch.

Will this result in a recession? Again, perception is reality here. If we choose to back off in fear of the economy falling apart, then the answer is yes. Makes sense why the government would hand back money in an effort to promote our recent habit bountiful lifestyle, huh? It'll be interesting to see what comes of these rebates. Here's the story from CNN.

By the way, we are now at 52 months of consecutive job growth, wages are still going well, the markets are still standing tall and unemployment is still down around 5%.