Inflation 2008: It's the Economy Stupid

When one hears of inflation in America, they immediately think of the rising gas prices. What one does not realize is that inflation today means more than just rising gas prices. (Trumball) Americans are crying for a relief for the many economical areas of their lives and one aspect of the rise of inflation I would like to address is how to stop it from rising too quickly.

The politically motivated message by the Clinton administration in the early 90's, "It's the Economy Stupid", should be widespread once more to give Americans a wake-up call to be on high alert from here on out. This is the second time around in both the latter part of the twentieth century to the beginning of the twentieth-first century that we are pretty much stuck in a rut.

People rely on the government too much instead of relying on what they should do in order to beat the crunch of a recession. A recession in America defines unemployment rates at an all time high, rising fuel costs and more recently, an increase in food prices. In America, where we preach "no one should go hungry", well even the middle class is starting to shop generic because of the uprising food pricing. The real estate market has fluctuated up and down over the past five years. Predatory lending plays a huge responsibility here and this is where the explanation of impossible mortgage rates appear in its ugly fashion.

For example, the state of Georgia hosts the largest filings of bankruptcies there. (Teegardin) The job market is riddled by an industry of self-made business owners. Georgia has a fast growing economy simply because the supply of homeownership is plentiful. What an average working citizen do not realize is that once they sign that deed, a nation-spread recession will hit Georgia the hardest, because of it notoriety of adjustable rate mortgage rates.

Up to six million Americans can be unemployed if a severe recession hits the US by 2011. (Mantell) Many industries have faded out due to outsourcing overseas. Losing employment is more than likely out of one's control. Again, people should not totally rely on the government to assist them if at all possible. The government is promising economic stimulus checks to those that net an annual income of $3,000.00. (www.irs.gov) The government is shoving the notion in the faces of Americans to spend their money in order to help boost the economy. Emotional spending will not pay the mounted bills that Americans have built due to unemployment. It is a given that paying down one's debt is essential to starting to rebuild the economy.

What is the Fed doing about the recession besides broadcasting the state of it on television? Although they cut rates earlier this year, the recession pendulum is still swaying over not just the US, but all across the globe. Cutting the interest rates would lower borrowing costs for a person to buy a home or take out a personal loan. Is it enough to get America back on track? Did the Fed respond too slowly when they saw the disaster begin to flourish and cause havoc for minority populations such as low-income workers and the elderly?

Retirement used to be a stage of life where one can throw a dart on a map and live permanently wherever the dart landed. Nowadays, retirement is just a phrase. Increase of medical care and lack of it, especially for the elderly, is clearly written in stone that unless a person was creative in saving throughout the years in their savings, the odds of living comfortably are slim to none. At this point, it is imperative for Americans to decrease their spending, take on a second job to make ends meet and pay down debt to help control the economy and try their best to save for a rainy day or should I paraphrase that to days?

Works Cited:
Mark Trumball "Is inflation index out of touch?", Money Central, Internet, May 16, 2008
http://articles.moneycentral.msn.com/SmartSpending/ConsumerActionGuide/IsInflationIndexOutofTouch.aspx

Carrie Teegardin, "Bankruptcies: Georgia high in debtor filings.", Internet, May 2008, http://www.ajc.com/metro/content/printedition/2008/05/02/bankruptcy.html

Internal Revenue Services, United States Department of Treasury, Internet, May 2008, www.irs.gov

Ruth Mantell, "Jobs at risk: Report finds another 5.8 million could be unemployed in severe recession." MarketWatch, Internet, February 3, 2008, http://www.marketwatch.com/news/story/recession-could-swell-ranks-unemployed/story.aspx?guid=%7BFA03E0D5-8D90-44FC-80CD-411F7D151701%7D