Economic Recession: 10 Lessons for American People to Learn

USA is in the midst of economic recession and there is no debate about it. It is the worst economic crisis after the great depression of 1930s. It is now almost certain that the US economy will not be out of the crisis in 2009. 2010 may become a better year but still, there is a long way to go. Large companies are suffering and millions of people are also suffering. Every month, nearly half million jobs got lost for the last few months. This has become a monthly ritual for the people to read about job losses of the previous month.

I was thinking about the lessons that American people can learn from the economic recession and here, I have made a list of 10 possible lessons.

1. Recession is real and can come again

The great depression started in 1929 and naturally, most people have not seen that with their own eyes. So, the idea may have come to many people that USA is the richest country on earth and economic recession would not touch its economy. The year 2008 perhaps taught these kind of people a crushing lesson that it can happen anytime to any country.

2. Living with Family has some advantages

Most people in America do not live to live with their family. In fact, this has some advantages. It ensures personal freedom and can keep you out of many family related problems and quarrels. However, I feel that living with or next to other family members have some advantages. The first advantage that you can get is that you can decrease your expense. If you live with your parents then surely, it will decrease many of your expenses. Secondly, in times of trouble and recession, you can get mental support from your family. In fact, in most Asian countries, family members and relatives try to help each other when someone loses his or her job.

3. Spirituality can help you to pass tough condition

This is obviously my opinion. I feel that in American society, there is a lack of spiritualism. People have really become materialistic. There is nothing wrong in it but the main problem is that when you give too much importance to your job and money then when you lose your job and you see that the economic condition is bad then surely, you will lose your mental strength. By spirituality, I am not just indicating religion. Instead, you can be an atheist but you can have some kind of idealism and passion for something. Life should be more than earning money and spending it.

4. When USA is in trouble then the rest of the world too. Don’t forget them

This is a very thing for the global economy. After recession hit America, naturally, the people of the country became worried about their future and it caused a big problem to those countries who export to the US. For example, India, China and Japan all of them suffered as their export orders decreased from Europe and America. Many people in China have lost their jobs and have returned to their villages after their factories were shut down. Some workers in Indian diamond industry have committed suicide after losing jobs. Try to think about them and then you will see that at least you are much luckier than them.

5. Save Money for the future

Many people think that they should try to increase their money all the time. As a result, they enter into risky places like Forex Market or Stock Exchange. Many of them do not have any idea about the risks involved with these markets and often lose money just like gambling. This is very bad and instead of risking their money, they can keep it in bank and then nothing will happen to it. So, do not take unnecessary risks especially in the markets that you do not have idea about.

6. Don’t become addicted to your credit card

I do not need to emphasize this matter because it has already become a national problem for USA. It happens from early teenage life for many people. They feel that whatever they like they should buy with their credit cards and then they can pay back. Several million people have lost jobs in the last one year and many of them are now finding it difficult to manage their credit card related credits and expenses. The credit card companies are getting smarter and they are trying to find a way that people cannot declare themselves bankrupt after failing to repay the loans of their credit cards. Understanding the gravity of the situation, US Senate just passed a bill that would sharply curtail credit card issuers' ability to raise interest rates and charge fees.

7. Travel to a poor country and be satisfied and spend less money

You do not need to travel to Africa or Asia. Instead, just visit some poor places of Mexico or even Haiti. Then you will notice that these people manage their life by spending just 10% of what you do or even sometimes less. Yet, they are happy and satisfied. You do not need to focus on the poorest people of those countries. Instead, take a look at their middle class people. They also spend much less money then you. Yet, they are becoming educated and living a decent life.

8. In recession, government cares only for the big companies not poor individuals

This is perhaps the biggest lesson to learn for American people. Obama announced a huge stimulus package, G20 countries also came up with $1 trillion package to create some life in the economies of those countries. However, all the money were for big companies and industries not for individuals. $1 billion dollar would happily head to save a bank but not $10,000 to save an individual. So, remember that you are on your own.

9. Don’t become crazy for buying a house

Credit crunch that came from the real estate sector pulled the trigger for the economic recession. I cannot understand the craziness of American people for buying a house by taking huge amount of loan from bank.

10. Invest on Education and Improving your Skill

US companies are outsourcing jobs on a regular basis to remain profitable. This may bring more profit for the companies but for the individuals, it is just disaster. I read a report in Yahoo: No Outsourcing Here: How to Train for the Best American Jobs. All these jobs need you be highly educated and highly skilled.

As the title of this blog suggests, I am just s hobby economist. I have written this entry for providing some food for thought. If you do not agree with me or feel that I have got the thing wrong then let me know your idea in the comment section.