How Does a Recession Hurt ME?

[Disneyoverload42]

The Budget Forum can be a tough neighborhood to visit and I've restrained myself from posting on this thread until now.

For those who've written about how people survived the Depression of '29, I think it's important to consider how they survived. For the majority of Americans--not including the extremely wealthy or those who leapt to their deaths from windows of the buildings on Wall Street--times were difficult.

Several months ago an article by Jim Juback over at the moneycental.com site generated hundreds of responses by people who had either lived through or had been children of parents who'd lived through the Depression. If anyone would be interested, it's a very humbling read.

I for one am not romanticizing the depression - I simply think it was lived through - as rough times are. I don't even have to go back that far for stories to draw on... my mother grew up without indoor plumbing. They kept their meat in a storage tank under ground because they didn't have a fridge. She picked up change at the drive in in order to have spending money - this was all 40 some years ago - not in the depression. And it wasn't in some rural area, they lived on the outskirts of a major city. My mom is the one who taught me that "this too shall pass" and "you can overcome ANYTHING in life if you put your mind to it".

I just think it's human nature to plow on - can't let the cockroaches win!

 

[barkley]

I agree, let's not romanticize it as a time when Americans had to "make do". It was a time of desperation and hardship - more than just giving up cable and not going on vacations.

My grandmother lived the depression as a child and had deformed feet the rest of her life to show for it - no money for new shoes. That doesn't even begin to tell the stories of no good food to eat, going to bed hungry, not being able to get health care when ill, not having money for properly fitting clothes, and the trouble that it caused between parents, families, etc.

I think all of us would be in for a serious reality check if we ever had to face an actual "great depression".

i was the 'late in life child' for my parents, both of whom grew up during the depression (though mom was quite young and did'nt remember much of it but dad who was a teen and young man during it sure did. as a result, many of the survival habits and long lasting effects of dad's youth were ingrained as i grew up such that they were part of our everyday lives.

we never were served any lamb in our home because of the mutton broth many chairities served during the depression (my father recalled it as so foul that even the smell of lamb made him physically ill). 'mustard salad' was a regular sidedish on the dinnertable because dad became accoustomed to his mother using ANYTHING to provide for a meal or sandwiches they could take on searches for work (it was made of cold mashed potatos, raw onions and mustard ). 'graveyard stew' was something my parents enjoyed regularly-dry toasted bread with warm milk over it. dad said it was often considered a tremendous meal in his youth due to the lack of funds to get milk. 'catsup soup' was frowned upon by dad but he did say that campbells tomoato soup tasted identical due to the sweetness ('catsup soup' was made by going into a restaurant and asking for just a cup of hot water-then you poured catsup from the tabletop bottles into it and added pepper).

dad was rabid about having good quality shoes for us because he had too many siblings and friends whose feet were deformed for lack of properly fitting shoes. dental care was a top priority as well due to the number of his family members and friends who died or came near death due to untreated infections and abcesses. immediate medical attention for potentialy infectious situations (like stepping on a rusty nail) was tops on the list-dad had a brother who was unable to get treatment and was near death with blood poisoning from an untreated cut at age 7 (survived but showed the effects in his legs and joints for the rest of his life).

my dad was like many others who not only lacked indoor plumbing but plumbing of any sort-they lost their home. there was no food to put into refridgeration of any kind. there was no spare change to pick up because no one dared drop it-and if any were to be found it would'nt have been spending money it would have been handed over to their parents for the family's survival (a look at the average number of highschool graduates during the depression points out how many YOUNG kids left school as early as elementary level to help support their families).

not that i want the economy to get bad or for anyone to suffer-but i do think it would be valuable for the 'average' kid to get a look well before adulthood at how easily financial circumstances can change. perhaps it will be a learning experience that will get them on track to save as their grandparents and further back did when they were able.

 

[natenapril]

As a Military family we sacrifice a lot but we are also fortunate that for the most part we are not greatly impacted by the National Economy. DH has job security with that comes annual raises(not huge but something), plus longevity raises and promotions. We also have a solid retirement with Medical, you won't hear me complaining....at least not too much.

We're in the same boat. My DH is only 1/2 way through his career in the Air Force. So I feel safe in his job. I am going back to school so we will see what happens when I graduate.
By the way Longsx3, We lived at Kadena from 1998-2003. We loved it! MY daughter was born at Lester. I would love to go back!

 

[dvcgirl]

There's an interesting article on cnn.com on what experts are now calling "the coming recession". While many think this will be a shallow and short recession, three economists here talk about their "worst case scenario". I certainly hope that they're wrong.

One interesting point that is brought up is that state and local governments make up 11% of our GDP. This is an area of the economy that is sure to take a hit from from that area with foreclosures causing a decrease in tax revenues.

The basic idea out there is that this recession *could* be a lot worse because it would be consumer led, with a housing depression, rising inflation and credit crunch thrown in for good measure. In 2001 we had a corporate led recession, really even more narrow...a tech corporate led recession and a major correction in the stock market. Most of the lay-offs were in that sector, consumers kept spending, and other than their 401Ks taking a hit, most people weren't affected.

http://money.cnn.com/2008/01/23/news/economy/how_bad/index.htm?postversion=2008012405

 

[fkj2]

I for one am not romanticizing the depression - I simply think it was lived through - as rough times are.

Just to clarify, I wrote observations and recollections as related by my folks and grandparents. I was not the poster who used the word romanticizing the depression in a post. And I made no reference to any other specific post.

When children today--or adults for that matter--feel deprived without cell phones or Ipods, I think it's reasonable to introduce into the discussion just how severely the Depression affected daily life.

 

[Free4Life11]

Well, the poor economy has hit my company. They just announced they are cutting 300 jobs and this is coming after 400 jobs they cut in October. It is very scary, but I hope my job is safe, I will find out on Friday when I go in to work. It is partially due to new government legislation that affects our industry but also the tightening credit markets...we do student loans and it is a lot more expensive to lend students money (and riskier!) All I can do is get through today and hope for the best tomorrow.

 

[dvcgirl]

Well, the poor economy has hit my company. They just announced they are cutting 300 jobs and this is coming after 400 jobs they cut in October. It is very scary, but I hope my job is safe, I will find out on Friday when I go in to work. It is partially due to new government legislation that affects our industry but also the tightening credit markets...we do student loans and it is a lot more expensive to lend students money (and riskier!) All I can do is get through today and hope for the best tomorrow.

Just wanted to say that I hope you keep your job!

 

[Free4Life11]

Thanks for that. My position was kept, so I am very pleased with that, but it's very sad to see many in my department leaving! This was a wake up call to me....I definitely need to increase my emergency savings and I sure won't take this job for granted.

 

[LoveBWVVBR]

As for me, everytime the fed lowers the interest rate the interest I get on my ING and HSBC accounts drop. I was getting over 5% before this whole thing started and I'm sure in a day or two I won't even be getting 4%.

I am getting 5.7% on one CD and 5.4% on the other right now. They come up in April and May respectively. I don't even want to think of the amount of $$ I'll be losing when I have to renew them at 5% if that

 

[momxx5]

The the OP question.....

cost of gas, cost of food, clothing, heating, water, etc. All added together with higher cc interest rates makes for a very tight budget.

Sad to tell the kids no soccer or you can sign up for basketball but not get bb shoes.

We lived so comfortably for so long. Now it has caught up with us.

 

[Mrs.Reese]

We are starting to see some cuts happening in our schools' budgets. The districts are really being slow in bringing on new staff. We will not be hiring any support staff in the next year. School renovations desperately needed are being pushed back due to state shortfalls. We're seeing an increase in families applying for free/reduced lunch and calls to social services. More children are coming to school hungry, dirty, tired, angry.

 

[dvcgirl]

The the OP question.....

cost of gas, cost of food, clothing, heating, water, etc. All added together with higher cc interest rates makes for a very tight budget.

Sad to tell the kids no soccer or you can sign up for basketball but not get bb shoes.

We lived so comfortably for so long. Now it has caught up with us.

Your last line speaks volumes....and I think a whole lot of Americans will be feeling the same way very soon if they don't already.

 

[pisces219]

we are feeling it. my job was eliminated this past oct, along with two others. i heard another person got let go last week too. last year at this time the company had 26 employees, two left on their own and another 4 laid off. so obviously they are effected by this and cutting back and if things continue on how it's predicted they may cut more people.

dh and i have been trying to get by on one income and some savings we had. we have cut back on some things(home improvements, eating out, and other extras) we have cut back even more tightly since the new year and had a very "light" christmas because we wanted to take a trip to FL to see some family and go to disney.

i remember when i went to the grocery store or walmart and never priced things out, just bought what i wanted. i also remember vacations where i bought new sneakers, clothes, purses, sunglasses etc or picked hotels, rental cars, flights, choose restaurants without even thinking about the price too much...so overall we had a much larger chunk of spending $$$. this trip is as budget as we could get it and i have figured out ways to keep our "during trip spending" low too.

however i think i have definatly learned a few things in the past few months, things i will keep doing from here on. when we return we will still be living on a very tight budget, not buying extras until i begin working. some people must think "if things are tight, why r u taking a vacation" well we want to see my family-aging grandparents and we have learned the hard way "they dont live forever" so it's important we go. and if we are spending the $$ to go to FL it's stupid for us not to go to disney because we got an amazing deal (dh is a cast member)

 

[JuneChickie]

subscribing

 

[Jeninindy]

From Dave Walker, comptroller of the United States......its long, but informative.....

http://youtube.com/watch?v=KjZBOCAgR64&feature=related

 

[sarahlovesmickey]

It is affecting my job because the worse the economy gets, the more calls and cases we get. I see my caseload going way up. =(

 

[dvcgirl]

From Dave Walker, comptroller of the United States......its long, but informative.....

http://youtube.com/watch?v=KjZBOCAgR64&feature=related

I like David Walker....bright guy, a true public official who is facing the facts that the politicians won't. Oh, and by the way, that 46 Trillion dollar underfunded figure is now 53 Trillion, just four years later.

 

[DawnM]

Read through the entire thread....whew! Great responses.

I am a *bit* concerned. We are not in the right area for DH's job if they end up needing to cut, but right now they are fine. Time will tell if there are any issues.

House sales do concern me.

Thankfully we have been faithful Dave Ramsey followers for almost 2 years and only owe 2/3 of our house, everything else is paid for.

Dawn

 

[Kay1]

Layoffs coming and in large number. Up 37% this year.

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080128/REG/600868279/1036

 

[kfeuer]

lastly, i have to wonder how many of my co 'baby boomers' now faced with the depletion of much of their anticipated equity nest eggs and reduced potential for earnings from investments (if they saved anything ) will put off retirement. i have to anticipate that reducing the number of annual retirees from most professions will result in fewer job opportunities for people across the board-and esp. recent college grads. a couple of years ago there was talk of the impending 'silver wave' of boomers retiring and making application for social security benefits, it will be interesting to see if instead there is more of a silver trickle.

I think quite a few won't be given a choice. My father's an engineer, and has worked for the same company since he graduated from college back in the 1960's. Unfortunately, this company's biggest customers are US auto makers He's in upper management and was hoping to work another couple years (he'll turn 65 this year) but he's been given an early retirement. Luckily he's getting 8 months severence pay and he's got 2 pensions to draw on (for however long that lasts), but it's a scary time to be entering retirement. They have a nice nest egg saved up, but things are just so uncertain right now.

I work for a small insurance agency, and things have been very tight around here in recent months. We've had quite a few commercial clients go out of business, and alot of others have smaller sales/payroll, which means their premiums are going down and that hurts us. My fortunes are tied to this business, so I'm really hoping we can weather the coming storms.