Recession Versus Inflation

There is no way to accurately predict which is more beneficial in the long haul, recession or inflation. Possibly one way of looking at these two alternative economic states is to think that each corrects the other. In other words, when the economy flies high and people want more and more with little concern or care of where it will eventually lead, the old adage comes to mind, ‘what goes up comes down’.

A good example is what we are now seeing in the stock market and in the world of business in general is what went up came down. Because too many were buying what they could not afford and those in charge who should have been refusing to sell to those buying beyond their means went along because they too were trying to make more money by lending, we now are in a recessed economic state. Or pretty close to it. The market must correct itself and does; but it does not aim to make people happy over this inconvenient truth.

Recession and inflation are balancing acts for the economy. Normally, people only buy what they need and only then what they can afford. The setup today badgers people to buy and penalizes them for their weaknesses. It beckons them onward toward bigger and better homes, as one example, and when they buy and cannot pay, they lose their money and their house and sometimes all hope.

All is not lost as good lessons are learned from inflation but the price is high. It would be far better if more people stopped demanding material things above their means; but as long as ‘things’ are used to classify one’s station in life, people will continue to abuse the system. The lessons are the realization that they have allowed themselves to be taken in by fast-talking advertisers and they will know better the next time, hopefully.Recession forces businesses to become leaner and more wholesome. It weeds out the superfluous and the unnecessary. Looked at in this light it is an extremely balancing act for the future; it is the reason for better regulations and more rational and equitable responses for both buyers and sellers. Recession allows one to take time out from frivolous spending and take stock of what is necessary.

Prices are high and the money being earned is low, what priorities are available but only to buy food, shelter, and heating equipment and to pay bills. As the money dwindles, so do many silly ways in which it can be wasted. And true, some of the ways once considered necessary no longer are that. When hoards of people face money problems together they fall back on an old time coping mechanism called ‘making do’. It means simply if you cannot afford what you want, then learn to want what you have. It is surprising what human ingenuity can do when put to the test.

You use the old furniture, wear your last season’s clothes, drive your car less to save on expensive gasoline, and penny pinch wherever you can. Feeing your family and seeing to their education becomes the top choice. No longer is it necessary to do what others of your peer groups do, what is necessary is pulling your self out of debt and into a healthier life style by utilizing what you already own and not insisting on the latest model when the old one works as well. Seen in this light, a recession is a shoring up and when the economy stabilizes, you remember the past hardships. You will enjoy your money more because you have gained some wisdom on how it should be spent.