The Recession of 2008 : What Americans Have Learned

Stock Market Investments are Not Safe - The first lesson that many Americans had to learn the hard way during the 2008 recession is that stock market investments are not safe. At any time, the stock market can crash, and there is really nothing you can do about it. The reasons for volatility in the stock market are completely out of our control. So it may not be a good idea in the future to put all of your liquid assets into the stock market.

On the same lines, it's not always a good idea to put all of our trust in banks as they are just as vulnerable as anyone else to financial distresses.

Debt Sucks - Our next lesson from the 2008 recession is that our national debt needs to be eliminated, and fast. It was revealed recently that several Gulf states have been lending hundreds of billions of dollars to the U.S. Two U.S. banks in particular have been bailed out by Kuwaiti financiers. It is estimated that 44 cents out of each dollar of U.S. debt is owed to foreign investors. (Source : Anthony Mason, "Gulf States Help Bankroll U.S. Debt," CBS News, http://www.cbsnews.com/stories/2008/04/02/eveningnews/main3991086.shtml )

Many will argue that this debt to foreigners is what caused the 2008 recession to hit so hard. There just isn't enough cash being generated by U.S. companies and banks to finance operations and meet obligations. We are all just hoping for a better day. This same effect came be felt in the average American household, where generating debt is a regular part of life. We have to borrow to educate ourselves, pay for cars, pay for homes, and start businesses. When plans don't pan out we end up overextended with our bills, just as banks are overextended with theirs. Debt is bad news anyway you slice it.

Forget the Jones' --- They're in Trouble Too - Before the real estate bubble burst, and the 2008 recession came to a head, people went about their lives as if living in a bubble. Their lives revolved around "keeping up with the Jones'" so they overspent and went into mounds of debt. Now, the Jones' and everyone else on the block are suffering in one way or another! One huge lesson that Americans (hopefully) have learned is that it is extremely short sighted to buy things you can't afford in an effort to impress others.

There Really is No Such Thing as Job Security - The final lesson for Americans from the 2008 recession is that you cannot rest on your laurels under the assumption that your job will always be there. Thousands of people lost their jobs during the financial crisis --- people who thought that their industries were rock solid. And it didn't help that more and more businesses are choosing to fire their long term employees and outsource the work overseas. So it's important to understand, from this point forward, that there is no such thing as job security in American culture. The best long term strategy if you want to build a legacy for you and your family is to focus on something that you do really well (and love) and try to build a business out of it; even if only on a part-time basis.