Economic Hardship Is Real, Not Perceived

It always cracks me up where I hear people talking about the current economic woes as if it’s all a matter of perception. They assume people aren’t spending money because they perceive a crisis that really isn’t there. They blame the media or whoever for giving us this negative perception.

It always makes me laugh.

Do they have any sense of reality? Do they know anyone who has lost a job? It seems like every week I add another person to my growing list of unemployed friends and family (thankfully I do see people coming off that list, but it’s still growing).

People aren’t spending money because they don’t have any to spend. Maybe that didn’t used to stop us Americans before, but it is now.

I’ll admit that perception may be a part of it, but for a lot of people I know, the reality is they don’t have the same income right now as they did a year ago. And they’re adjusting accordingly.

I came across an article today about some financial expert who said the worst is yet to come and that our standard of living is undergoing a “permanent change.” I don’t know if that’s true or not (the financial experts seem to have less expertise these days), but it doesn’t seem like a bad thing. It’s not going to be pretty and it’s going to hurt, but a lower standard of living might be what we need. Now more than ever the financial advice to live beneath your means (not just within them) makes a lot of sense. This economic downturn wouldn’t be so difficult if we did that.

And that difficulty isn’t perceived, it’s real. Just ask a contractor.

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