Back in Black? Whenever it is I Will Be Ready

Over the past year I've watched the United States economy collapse like a building torn from its very foundations. In recent weeks we've seen some small signs of recovery. My personal opinion is that we are probably living in the bottom right now. Are we finally back in black? Maybe. Maybe not. I will be ready whenever that takes place, however the point is not when. The point is what I've learned throughout this whole recession.

In my whole lifetime I've never actually seen anything quite this bad, and we keep on hearing about how this is the "worst financial crisis since the Great Depression." That may or may not be true, but I certainly cannot remember anything worse. It certainly has changed me like no other historical event that has happened in recent years, more even than 9/11. You might ask, "How can that be?" Well I don't live in a major city nor do I have plans to. I do not see myself and my area as under very big threat from terrorism. My heart goes out to those who suffer from fear of terrorism every day, in places like Israel for instance, but it just won't happen in my town and chances are it won't even happen in New York City for a very long time. 9/11 was one tragic event, and of all the times that people have tried to commit terrorist acts that one happened to slip through. It really was a fluke and nothing much else. A very unfortunate fluke.

This economic thing is much more than a fluke, it will probably happen again, to me no less. The economy tends to run in cycles, and this has been the reality for most of history. There are a variety of factors affecting the business cycle, but the point is that we will always go through our ups and downs. The trouble is that when we came to one of the worst downs in recent years we simply were not prepared. The American people had spent themselves into oblivion on things they could not afford; easy credit, easy money, easy everything. It was just too much easy and not enough hard. People were not willing to make hard decisions like saving. It's that simple.

I've known old people who were very frugal. These people remember the Great Depression. The Great Depression was many, many, many times worse than what we have now and probably worse than anything we will ever experience. If you go to a poor country like Russia you will see conditions like it was during the Depression in some areas, and as bad as it may be we are nowhere near there. Sometimes when I hear people comparing this whole thing to the Depression I always take note that it is people who were not around back then, because those who were there would never dare make such a comparison. It is just "Depression" compared to how things used to be for us, and this whole waking up period might seem like a permanent Depression for some of the biggest spenders out there. Those who learned their lesson then continue to be frugal in their old age. Those who didn't and those who didn't live back then generally failed.

Oh, my friends, it is not a matter of if, it is a matter of when. We just have to be prepared. We do not have to go out into the woods of Idaho with a truck full of MREs, but we need to have our heads up. I think the "system" is stable enough that it will not ever collapse completely, at least not in my lifetime. It may never even get as bad as it did. In the long run I expect to be better off than the previous generation and I expect the next to be better off than me. I expect poverty to decrease worldwide and more middle class people to become rich, in the long run. Nonetheless, I offer a caveat. The caveat is that there will be times when that improvement will seem to evaporate, and it is for those times we must be prepared. They will always go by, sure, but the point is that you don't really know just how far you can fall in such situations. That is where preparation comes in.

I myself will without a doubt be making an effort in my life to be as frugal as possible. If that means putting some things off, so be it. The number one goal needs to be to have money set aside for a rainy day. When we hear about "financial freedom" what is meant by that is debt-free living. You can't shirk on your obligation to get out of debt or else you are going to be hurting. I might take it further than some people, but at the very least you have to be aware of what you are spending. Settle for a smaller house, settle for a less fancy car, and above all, if you are in debt DO NOT go on vacation. I haven't had these problems, but it is the fear that is getting at me.

The fear. I don't want to be afraid, but I am. I think to myself and I look on how much I have and I am thankful for it. However, as I saw this economy slip I couldn't help but think that if it kept on slipping and slipping with no end in sight things might go bad. It will go from doing without the extras to having to do without necessities. Could we become like Russia? Or worse? It could happen. We could crash to that level. It most likely will not happen but it could. If it does happen you need to be ready, and if you are in debt you are not. Debt is an inherently repressive thing and is consistently used as a tool of repression throughout history. Being free of debt has not so much to do with financial freedom as it does with personal freedom. Get in too deep and your personal freedom evaporates as you become a servant to your debt. These are not light lessons; their gravity is far greater than we can imagine. If it ever happens again, I hope I am not caught off guard as so many were this time.