The way out of this recession
This economic downturn has been both severe and lengthy. We're all ready for it to be over.
How does that happen, exactly? Do we need to wait for Fed Chairman Ben Bernanke, the president or the treasury secretary to tell us so? Do we need to have the news media proclaim it? Do we need the stock market to reach a certain level?
While all of those things will eventually happen, the way out of a recession isn't in their hands. It's in yours.
That's right, you determine when it ends because you buy that TV, the business you frequent buys that new copier, or that firm hires a new worker. Basic Keynesian economic models show getting out of a recession takes spending and investment. Keynes didn't necessarily draw a line between frivolous spending and frugal spending. It was all good. This is why government spending on stimulus is most often used: the government has deep pockets (or at least a great capacity to borrow and spend.)
How does this apply to you? Eventually you're going to get sick of this gloom and doom and go out and make that purchase you've been putting off. Maybe a few of your neighbors do the same. Suddenly, the store owner calls the manufacturer and orders more. And the manufacturer fires up the production line, calling workers who were laid off back to the job. And with some money in their pockets, they make a few purchases they've been putting off, and so on, and so on.
President Bush was often criticized for his remark when asked what people should do about the recession and the wars. He said to go shopping. But Bush was right: that's how recessions end.
I, for one, am completely tired by this recession, and I'm ready for it to be over. I'm tired of everyone looking at each other across the divide, wondering when it's safe to open the checkbook again. So I'll take some of my own advice and spend some of my dollars locally to jump start this economy of ours.
Care to join me? We can do it together.
The Pioneer Journal editorial represents the view of the editorial board, and not necessarily all of its employees. Today's editorial was written by Steve Schulz.