The late depression

Although it was impossible to tell when I was at Disney World last month (what with how crowded the parks were and how people appeared to be spending money left and right), but I guess there are problems with the economy after all. Set aside the Dow’s 250 point drop today. I look at my retirement accounts perhaps 4 times a year, when I get my quarterly statements. The statement that arrived for one of the accounts today showed a net loss of $6,000 from the period between January 1, 2008 and March 31, 2008. Granted, I’m in it for the long haul, and so seemingly big losses like these are eventually offset (one would hope) by big gains down the road. But still, it makes me wonder how bad things really are. Obviously we don’t see breadlines yet, but then again, we have some protections that were implemented in the 80 years since the Great Depression.

I don’t like the word “recession”. It seems like a made-up word to me. It’s like putting the words “efficient and effective” in a performance review. They really don’t mean much. Besides, it doesn’t seem to fit the description. After all, “recession” implies a scaling back–it’s what waves do when they retreat from the beach. But I don’t really see much of a scaling back (I’m thinking of Disney World again, I suppose). A depression is much more descriptive–a massive hole in the ground. With the mortgage crisis, many people are finding themselves in hole trying to make their mortgage payments.

And here, I must pause to congratulate myself a thousand times over for not caving into pressure to purchase a house a few years back. Given what I could afford to have put down, and given the change in the market, any house which I would have purchased would have been worth less money than what I paid for it, and I too, would have been digging out of a hole from the get go. True, the money that I pay for rent is not earning me any equity, but neither would the money I put into a house these last few years. And at least with rent, I’m not out anything except what I pay for the service (housing) which I get in return.

Others, myself not withstanding, have a credit card bill to pay off. But, except for scaling back on gasoline (what with the runaway prices), I don’t see people “recessing” their spending. I work above a big, busy mall and I don’t see stores shutting down. It always seems pretty crowded to me (and overpriced!) and still people are spending.

Obviously, the is not (yet) a great depression, but then again, after the great depression, and the New Deal, efforts were put in place (like social security and other social welfare programs) to protect against or fight future depressions. It seems to me, however, that the government’s recent issuing of a economic stimulus check to taxpayers is a clear indication that the government feels we are in a depression. The checks might have a fancy name, but I don’t see how they are any different than social welfare payments–except that it’s a one-time payment to all taxpayers. But it is for our welfare. It is hoped these checks will stimulate even more spending than is already going on. What happens next, I don’t know (I was always terrible at economics). Let’s just say, “magic happens” and then we are out of our depression and the economy is roaring again.

Except that I keep forgetting: I’m not at Disney World anymore, with the Magic Kingdom ever looming over my head, looking out for me.