Top Five Things Needed in an Economic Recovery

Things couldn't possibly look much more bleak than they look right now for the American economy, as well as for much of the global economy. The housing market was the first sign that things were turning south, then the credit market, then the financial system as a whole and finally the job data. Obviously it's more than just these things, but these are the most important in my opinion and they fell in that order. Many are arguing now how we got into the mess that we are currently in. The answer to that question is one that many people will debate for quite a few years, but instead of belaboring the negatives I decided to look at what needs to happen on the positive side for an economic recovery to take place.

Top five things needed in an economic recovery

1. Consumer confidence to rise- There is no hiding the fact that consumers are two thirds of the American GDP, so they obviously need to feel confident and ready to spend their money. If American consumers aren't confident whatsoever and simply want to hold onto any money they can find, the economy can't possibly turn around. The consumer is key.

2. Job market improvement- The job market is extremely important to everyone because no one can be confident or believe in an economy that is bleeding jobs by the thousands each week. As people begin to feel more confident that their job is relatively secure, consumer confidence will begin to tick upward and the economy should rebound.

3. Trust in the financial system- This isn't necessarily the case in all economic recoveries, but the one we are currently in is definitely in this category. All the scandals and the bailouts of so many companies that have gotten so greedy and then run out of capital has turned people away from the stock market and the financial system as a whole. We must believe that we can trust the numbers we see in balance sheets.

4. Better education systems- This may be indirect in some ways, but let's be honest and say that the better the education system works the more skilled and knowledgeable our workers will be, which will benefit our economy quite nicely in the long run. Education is a long-term key to keeping an economy moving along.

5. A renewed sense of hope- Our country has to feel hopeful about the future of the country and our economy. The bottom line is a pessimistic society which believes we are on the wrong path as a nation isn't one in which an economic recovery is very likely at all. Americans need to feel like we are ready for better tomorrow.