Recession, Recession - Please Go Away!

Since December of 2007, the United States of America has been in a - brace yourself - declared Recession. We often hear this word thrown around, scattered in our newspapers and cleverly evaded by our Representatives - even facetiously employed as the proverbial "butt" of Jon Stewart's jokes.

Any school age child could tell you that we are suffering harsh economic times - but what they cannot tell you is why.

In fact, many political pundits could not even tell you what exactly a "recession" entails. Believe it or not, there is a legal definition constituting the rather simplistic component(s): a decline in GDP for two or more consecutive quarters. All that flowering nonsense about high unemployment rates, a decline in the stock market, and diminished interest rates are actually what accompany the initial drop in GDP. Persisting long enough, a recession will become a depression.

The troubles American car industry suffered in the past few years is a sufficient analogy to our general economy. Ford, for example, experienced a stark decrease in sales, shrinking profits, and accumulating debt - not unsimilar to the more general and all-encompassing national economic retractions. To marginalize the debt, employees were laid off and salaries were cut - again, just as occurred in the mainstream.

Without the "help" of federal dollars, Ford put out a fiscal report this month indicating earnings of $2.6 billion in the second quarter, with the expectation of further profits. In fact, they predict that by the end of next year, their profits will surpass their debt.

This is the 5th consecutive profitable quarter for the Ford Motor Company - a feat hardly imaginable two years prior. And while debt has surely accumulated, the company is working towards quickly paying it off.

Our federal government (and the Federal Reserve) could take a lesson from this example. Debt is not erased by more debt - it is eliminated through profits. I think it would go too far to assume that the US is bankrupt; but it is certainly headed in that direction. Spending will not, and obviously has not, set our economy back on the path to profitability. If you want to spend money, you have to have money. And the federal government has NONE. In fact, they have less than none - about $10 trillion less, in fact.

But then again, if I had hundreds of millions of blind minions paying my bills, I guess I might just increase their debt to pay for mine...

Don't forget that the largest source of revenue for the US Federal Government is your pocket. Saving is the only solution to this mess of a debt we've gotten ourselves into.