The Great Recession (in my book a depression) was officially over June, 2009. Then the recovery began which has been written about several times in this blog. Now it appears, Americans are spending again through reports showing an acceleration ever since July of this year.
Didn't we learn anything?
Well, there is a little ray of hope. Americans are accumulating less "stuff" and going for more practical items. Yet, we spent 93.1% after-tax income on goods and services in the 3rd quarter this year and also in October. People spent the same share of income as they did during the 2000s and more than during the 1960s, 1970s, 1980s or 1990s.
Say you own a business, would 6.9% of your funds in your bank account be enough for long term survival? I am not talking about investments of any kind to make it a simple analogy on purpose. Just saying--could you tuck away about 7% of your net profits and weather the storms and if so for how long?
If we use the June, 2009 date as the time recovery began, then it has been about 2 years and we are back to our spending habits. We were saving our money, deciding what was important, and having "board meetings" in our homes to discuss what to take with the funds left over from paying our bills.
I for one don't agree recovery began in 2009. Too many companies were still in pain. They stabilized by the summer of 2010, but that meant they weren't losing anymore. It didn't mean they were gaining until maybe the beginning of this year. So say by December, 2010 the true recovery was emerging. That means Americans have re-discovered their spending habits within 6-9 months, not 2 years as mentioned above.
Let us take and use some lessons that businesses apply everyday. We also know that companies are holding on to their reserves pretty tight right now. There are too many of them not to ignore this strategy.
There has got to be a reason. After we too have set aside some cash, let us look at our discretionary funds, make wise choices, and support our local economy for a balanced and full way of life.
See: See: http://www.usatoday.com/money/perfi/basics/story/2011-11-22/consumer-spending/51354602/1?csp=34news&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+usatoday-NewsTopStories+%28News+-+Top+Stories%29&utm_content=My+Yahoo
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