Jobs, Homes, Savings

Jobs, houses, and savings…these are the three most important things that take a hit in a recession.

Homeowners know all too well that the value of their major investment is crippled, and in many parts of the country the drop is deepening. Have you heard the term negative equity? That’s what happens when you end up owing more than the house is worth. This is the situation in which many homeowners found themselves after the ‘housing bubble’ burst in 2005-06, and this is a (or possibly, the) major cause of the larger economic problems.

Savings are taking a similarly severe hit, whether it’s a pension plan, retirement account, or any other sort of savings investment. While a few influential individuals are doing quite well due to the stimulus package and TARP funds, the vast majority of us are seeing a leak in the container that holds what little money we’ve managed to put aside. It doesn’t help matters that the majority of investments are handled in one way or another by the selfsame banks allied to the savings and loan industry…

The third factor that must be considered is jobs. Fewer people are working, and the number also keeps getting higher. So that’s fewer people able to pay into their increasingly worthless homes and savings. Every so often we hear about ‘indications’ that the trend is slowing down or reversing, but pretty much everyone agrees that this will only happen when we’ve hit bottom. Which means, of course, that we can look forward to things being either worse, as bad as they can get, or (in the best case) only as bad as they’ve been.

Luckily, even the repo companies and local governments are falling on hard times, so there just isn’t enough people to force the newly poor out of their homes…and into prisons, shelters, or the grave (all three of which are, of course, bad economic positions…).

If you have some money and want to show someone that you care, gift baskets are a great gift.