- Special Sections
- Public Notices
In the last few weeks we have reported about the layoffs at Springs Memorial Hospital, the possibility of job losses at the Lancaster County School District, pleas from nonprofit agencies for continual funding and the inability of a local philanthropic organization to offer free summer camp for at-risk children this year.
Add to that $4 per gallon gas, high unemployment, decreasing home values, increasing food costs and you get a bleak picture of our economy.
Steve Rick, an economist from the University of Wisconsin-Madison, confirmed that analysis recently to about 400 people at the University of South Carolina at Lancaster Bradley Arts and Sciences Building. Rick had been invited by Founders Federal Credit Union to speak at the county’s first economic forum, cosponsored by the Lancaster County Chamber of Commerce.
Fewer jobs, higher inflation, higher debts and the falling dollar value have contributed to dismal economic forecasts.
The major fears are “wrenching recession and spiraling inflation.” And there are indications of both. Rick equated rising oil prices with recessions. He cited data to confirm that theory. Other factors contributing to the stale economy are dropping home values and lack of savings. These factors contribute to less consumer spending, less production needs, less need for workers – the domino effect on the economy.
The sub-prime mortgages – the practice of lending money to people who could not afford the payments has rocked the lending business. Rick said there are three groups of people, “the haves, the have nots and the have-not-paid for what-they-haves” – where many people find themselves right now.
In an effort to stimulate the economy, the federal reserve has lowered the prime interest rate eight times to spur borrowing and spending. That has not been effective so far, Rick said.
The government has also implemented the economic stimulus checks to encourage consumer spending. Rick and the majority of the audience is not sure how much the checks are going to improve the American economy.
“The economic stimulus checks actually are stimulating China’s economy more than the U.S. economy,” Rick added.
If you happened to be at the forum, you were highly informed and educated, but not too uplifted. Yet, there were bright spots. In times like these people tend to take stock of their spending habits, focus on paying off debt and more on saving. They attempt to fix their “personal balance sheets.”
Builder’s Supply owner C.D. “Bubber” Gregory echoed that philosophy.
“Recession can be good,” Gregory said. “It can wash out bad practices in the current economy.”
There is no doubt these are difficult times. Gasoline prices continue to rise and are not expected to come back down. Some of us await the ax as more jobs disappear. The U.S. dollar value is a question mark.
But the outlook doesn’t have to be dismal. We can make a difference by putting some good economic practices in place. Focus on the essentials, delay the non-essentials. Combine errands when driving. Carpool. Shop at discount stores. Carry your lunch. Force yourself to save. These seem like simple practices, but they can pay off.
History shows that we have survived previous recessions. And if we apply good economic practices we can survive this one, too.