By Chris Buchheit on October 3, 2010
.jpg.aspx?width=75&height=75) It remains up for debate whether or not the economy is showing signs of improvement. However, when the economy does get back on its two feet completely, there are a few things that an improved economy might mean for you.
At first, an improved economy would correct the problems that created the crisis to begin with. When the housing market dried up, it was because of a lack of credit from the banks, due to fault lending practices that ultimately ended up in mortgages that were not paid back. This situation cumulated in the credit crunch, which prevented banks from giving credit to businesses. When this event occurred, businesses were forced to lay off employees, resulting in record unemployment and added the feather to the cap of several down turned American auto makers. Following several bailouts, the auto makers have begun their comeback, and the banks are back on track, having already paid back their portion of the TARP fund. Small businesses, who often depend on credit from banks, were likewise forced to cut costs. The lack of employment has, in some states, forced state governments to extend unemployment advantages, thus drying up their budgets. This situation meant that several government employees were either laid off or had their salaries reduced. So would an improved economy reverse all these trends?
An improved economy would first either assume that businesses no longer had to cut costs, or that banks were lending less cautiously. Either way, the first symptom of an improved economy would be more available jobs. If this were to happen, suddenly employees would have more money in their pockets, and would be more willing to spend it. As a result, people will be spending more money on consumer goods and ultimately want to borrow more money from banks. Because of an increased economy, the housing market will bounce back, the auto industry will see increased revenues, and the rest will be downhill from there. More jobs will be available, prices will become cheaper, demand for products will rise, and opportunity in the private and public sector will become more plentiful. Credit would be loosened up, meaning that it would be easier for you to get a loan. The bottom line, however, is that jobs will be more readily available.
When the economy improves, the signs will be absolutely apparent.
Chris has been double majoring in Asian Studies, with a concentration in Chinese, and Political Science. When he isn’t slaving over his honors thesis, looking up a bunch of Chinese Characters, volunteering, or mindlessly browsing the same websites over and over, Chris enjoys writing short stories and novels. |