Unless you’ve been in a coma or living in hole for the last eight weeks, you know that the economy is in one of the worst places it’s been since the Great Depression. A recent Gallup poll found that 75 percent of Americans say they have a negative opinion of the U.S. economy. No surprise there. Turn on the news for two minutes and you will no doubt hear the latest expert analysis of the unraveling economy.
But in an interesting twist, 60 percent of Americans say they're not worried about their personal finances, according to another Gallup poll. With the economic outlook still bleak, particularly as we approach the holiday season (the most critical time of the year for American consumption), these polls indicate that many Americans do not believe the problems of the credit industry and a debt-laden U.S. Government will affect their personal accounts, investments, and spending habits.
If the past is any indication, this assumption is wrong. During the five years immediately following the market crash of 1929, the average citizen suffered tremendous personal loss, and consumption was slashed across the board. Food spending dropped 41 percent; spending on automobiles took a 33 percent cut; and in the all-important housing industry, consumption plummeted from $11.5 billion to $7.5 billion—a 35 percent drop. Although food and auto industries haven't yet realized the full impact of the economic downturn, the housing industry certainly has. According to the National Association of Realtors' quarterly market report, which includes 152 metropolitan markets nationwide, home prices have declined 9 percent since the third quarter of 2007.
Some of the optimism about personal finances could stem from the recent nose-dive of energy costs, in addition to the fact that relatively few mortgages have slipped through the cracks of corporate buyouts and federal bailouts. Although the immediate effect of lower fuel costs and still readily available credit may provide temporary relief to middle and lower income families, there are several effects of the economic crisis and resulting bailout package that should be a source of concern to the average citizen. Seldom are events this destructive to the corporate world not felt in the average living room.
But as Christians, we have hope. This week, Veritas has set out to sort through the economic crisis. We want to know what we can expect to see happen in the next few years: in our living room, in our cubicle, and even in our personal faith. Check back to find out how the economic downturn will affect your personal life and several things you can do now to be prepared for the future.
