Out with the old

For the longest time, I’d been thinking our economy was headed downward. Lately I was even thinking we were headed toward a great depression of sorts, but a comment by one of the retired, old timers in the bike club, while we were having coffee/tea after our ride, got me to thinking. He said,

I’m sure glad I’m living on a fixed income.

That’s when it dawned on me, while so many people have condemned social security as a ponzi scheme, it may be the true savior of our economy. Sure things will likely worsen some for many in the next couple of months, but there is an abundance of retired individuals, having the protection of that social net, who will ultimately help cushion the blow, until the various proposed stimulus programs are implemented.

Social security didn’t exist in the 30′s, and neither did unemployment compensation, and that contributed greatly to making the great depression ‘great’. Plus the numerous stimulus package(s) that were introduced, at the time, were of such a feeble nature, they were ineffective. It wasn’t until the onset of WWII, when a large enough stimulus was introduced, that the economy really got kick started.

That’s not going to happen this time, and I don’t believe we’re destined to repeat the mistakes of the past. And with people like Fed Chairman Ben Bernanke and Christina Romer, head of Obama’s Council of Economic Advisors, both scholars of the great depression, I am for the first time, in a long time, becoming optimistic [about the economy].

And after last months jobs report, it appears many more politicians are also seeing the necessity to save GM, Ford and Chrysler, and for a massive economic stimulus, on a scale comparable to what got us out of the great depression.

Sow it’s out with the contrarian/pessimist of the past, and in with the optimist. Ok at least a contrarian/optimist. One should never get too complacent.