Economy for 2011 - Your Thoughts

[Warpedmom]

I am interested in your thoughts on how the economy will do in 2011.  Do you think it will Recover slowly or take another hard hit.  I'm trying to stay prepared in case of another hard hit and I don't want to get caught in a false sense of security.  We are one of those family's that are making it now, paying our bills with a tight budget but another hard hit or further increase in prices will hit us hard.  Also the tax incentives if not put back will hit us hard, I think.  We live in DFW an area that wasn't hit nearly as hard as the rest of the country thankfully.

[Denvergirlie]

Well, most on this forumn would consider me more of a "tinfoil" hat type person; In that I personally think the economy will stumble along for a few years and then crash, and crash hard.

Home prices are still dropping and foreclosures are still mounting. Pair that with unsustainable levels of debt, both consumer and goverment debt, and then of course there is the 9.8% unemployment rate that doesn't capture the real unemployment rate. Food and energy costs (electric, gas, fuel, etc) are all going up.

Overseas, it seems that things are crashing even harder and faster. Riots on the streets in England, Greece, etc. The governments over there are drowning under their social progress programs, some countries are looking to dismantal their universial health coverage and austerity measures are hitting everyone.

As for the US's future, I think things will continue to stumble along for a few years. Baby Boomers are retiring at a rate of 10K a day and that will continue for the next 15+ years. Social Security is under funded and in 2011, social security taken from our checks will drop, I personally will take home $160 more a month in pay, but that leaves SS just that much more unfunded. I feel that it's nothing other than kicking the can down the road.

Hopefully some others will chime in with a more positive view point for you, but me personally, I don't see it reverting to anything like it was before the crash.

[heathenmom]

[meandk0610]

Originally Posted by Denvergirlie 

Well, most on this forumn would consider me more of a "tinfoil" hat type person; In that I personally think the economy will stumble along for a few years and then crash, and crash hard.

Home prices are still dropping and foreclosures are still mounting. Pair that with unsustainable levels of debt, both consumer and goverment debt, and then of course there is the 9.8% unemployment rate that doesn't capture the real unemployment rate. Food and energy costs (electric, gas, fuel, etc) are all going up.

Overseas, it seems that things are crashing even harder and faster. Riots on the streets in England, Greece, etc. The governments over there are drowning under their social progress programs, some countries are looking to dismantal their universial health coverage and austerity measures are hitting everyone.

As for the US's future, I think things will continue to stumble along for a few years. Baby Boomers are retiring at a rate of 10K a day and that will continue for the next 15+ years. Social Security is under funded and in 2011, social security taken from our checks will drop, I personally will take home $160 more a month in pay, but that leaves SS just that much more unfunded. I feel that it's nothing other than kicking the can down the road.

Hopefully some others will chime in with a more positive view point for you, but me personally, I don't see it reverting to anything like it was before the crash.

i agree with this. i'm also very concerned with inflation on food.

[stanleymama]

I agree with Denvergirlie too.  

[VisionaryMom]

My view isn't as dire, but many economists are now predicting an additional soft crash in 2011. I think that's likely given that unemployment and housing are both up and down right now. I've also been reading about how many employees (up to 25%), even in professional jobs, are going to become long-term temps and/or contractors, which means that expenses will go up for many families because they'll have no benefits.

[justmama]

Things like this scare me.  I am glad I got out of debt and I have a job now but we are still wildly unstable if anything disastrous should happen.  I'm curious to hear how people such as our "tinfoil hat" friends are preparing for their dire predictions.  I mean, basically they say that life as we have previously known it is over.  Aside from the people stockpiling weapons and digging nuclear shelters, how would you prepare for life to get radically different where food is expensive and health insurance is expensive and life in general is too expensive to afford.  Obviously incomes aren't going up, you are pretty much llucky if you HAVE a job these days.  So what to do if you aren't in a position to become self-sufficient on a farm with animals and well water and being off the grid?  What's the typical American citizen to do in a situation like we are facing?

[lmonter]

Originally Posted by justmama  So what to do if you aren't in a position to become self-sufficient on a farm with animals and well water and being off the grid?  What's the typical American citizen to do in a situation like we are facing?

I'm doing what I can with the resources I can.  Granted, my little .29 acre lot is bigger than some folks, but just look at the Dervaes family in LA on their .10 acre.  I squish a bunch of growing goodies throughout my yard given my shade and child running restraints, and have been debating chickens on and off the last few years.  I track down local produce and get to know the folks a little bit (I have my tomato lady on FB for crying out loud, and have given her and some orchard hookups some of my own canned goodies as thank-you's), and preserve as much as I can get my hands on.  And honestly, when the kids are a little older (aka, the nursling isn't teething so much and wanting to nurse as much), later this year I really want/need to get involved in my local water board to see if we have any kind of backup plan for if the power goes off.  It's only a little 160-home water system (there's a bunch of private water districts where I live), but the pump is still electric.  Having a hand pump would still be a pain, but it would at least be water.  :D

Although I do have to admit I'm not the typical American citizen.  I still am fond of the Bill of Rights, I don't expect the gov't to rescue me, and kind of figure we're on our own so to speak.  Hence why I pay attention to things, hunt down like-minded friends when I can, and stockpile.  And, I do have to say, having a nicely stocked pantry/toiletries/medicine cabinet/etc.?  Freakin' rocks when you're laid off because that's one less thing you have to immediately worry about.  Kind of like going back to how things used to be done even back in the 40's and 50's - a lot of folks (especially farmsteads) would stock up on enough food for the year or three, just in case of lean years or bad harvests and so on.  Kinda seems like common sense if you have the space, eh?  If not, again, you work within your constraints and get creative.


ETA: We also heat with wood stoves, and during the summer without fans or A/C we'd probably just move down into the basement that's mostly underground because our house sucks layout-wise for air circulation (thank you 1970's!).  We'd still need some gasoline for the truck and chainsaw, but could bike to grocery stores if we *had* to - it's just not easy to do so when you have 4 kids with you.  ;)

[worthy]

Originally Posted by justmama 

Things like this scare me.  I am glad I got out of debt and I have a job now but we are still wildly unstable if anything disastrous should happen.  I'm curious to hear how people such as our "tinfoil hat" friends are preparing for their dire predictions.  I mean, basically they say that life as we have previously known it is over.  Aside from the people stockpiling weapons and digging nuclear shelters, how would you prepare for life to get radically different where food is expensive and health insurance is expensive and life in general is too expensive to afford.  Obviously incomes aren't going up, you are pretty much llucky if you HAVE a job these days.  So what to do if you aren't in a position to become self-sufficient on a farm with animals and well water and being off the grid?  What's the typical American citizen to do in a situation like we are facing?

You figure out how to make do with what you have, which most of the people on this board are pretty good at anyway.  You make a plan before hard(er) times hit so you're not caught in a corner.  You do the best you can, you try not to stress about what you don't have or can't do, and you strengthen your network and resources wherever you can.  This article has some helpful ideas (I hope it's okay that I posted a link - someone please tell me if it is not.) 

I think the best thing you can do is plan ahead for whatever you think the most plausible challenging scenario might be.  This is not an all or nothing kind of deal...any amount of thoughtful planning, prepping, or anticipation will help ease the bumps in the road.  You don't have to build a bunker on 200 acres of deserted land where you grow 100% of your own food and make everything else you need.  You don't have to have guns or chickens or a cargo bicycle built for four.  The economy will continue to function, it just won't be as smooth for as many people as it has been in the past. 

In response to the OP, count me among those who do not think it wise to expect a "recovery" in the next year, or ever.  I think our economy is going to go slowly downhill, with some relatively small ups and downs along the way, but upswings should not be interpreted as a sign that the economy is going back to where it used to be.  I don't think it ever can go back there, to the time of easy consumerism, easy credit, easy living.  I think this is a hard thing to swallow, but it will be easier in the long run if we get the fantasies of recovery out of the way now and proceed with eyes wide open to the realities that we face.

I think the thing to do is adjust our expectations so that we truly are living within our means, with some wiggle room in case our means get smaller.  I won't pretend that this is easy for most of us.  Of course it isn't.  But the wrong thing to do would be to spend and live as if you expect your income to rise next week, even if you used to make twice as much as you do now, even if there is a chance you could get a raise.  You can certainly HOPE it will rise, but you can't count on anything except what you have right now, so do what you can to make your current scenario work indefinitely.  It's hard to contemplate change, especially when you're used to a life more comfortable than what you can currently afford, but I think it's probably necessary for many of us to take a hard look at our lives and our expectations and scale back in anticipation of continued hard times (or harder times to come).  I'd rather be prepared for that to happen and be wrong, than be unprepared and wish I had done something, yk?

{{{{hugs}}}} to all who find this topic stressful.  That might be all of us.

[Warpedmom]

Thank you for your responses.  This is in line to what I was thinking as well. 

[~Boudicca~]

I'm on the same page as Denvergirlie.

[happysmileylady]

Honestly, I don't think we need to go back to right where were.  I don't think our economy should be based on credit and debt like it has been.  I think we need a radical change to go back to a place where the stuff you buy is actually paid for with real dollars, not future dollars that may or may not materialize.  I think we might just be in the beginnings of that change and if it continues, it's going to be a hard change for everyone. 

I am however somewhat pessimistic that we will actually make that change, so yeah, I think the economy is likely to end up back where it was, eventually.  I don't think it will happen in 2011.  But eventually.  I don't believe that we are going to end up in the bankruptcy situations that so many European nations are, because we don't have as many government funded programs as they do. 

[mama1803]

Originally Posted by happysmileylady 

 because we don't have as many government funded programs as they do. 

 we don't have as many as they do--yet ( but were getting there fast)

[A&A]

$5 gas:

http://money.cnn.com/2010/12/27/markets/oil_commodities/index.htm

One thing you can do right now (if you own your home) is make sure that your house is well-insulated.  Many states and/or utility companies are offering rebates for purchasing insulation / new windows, making it more affordable.  And that will lower your utility bills in the future. 

[fierrbugg]

Originally Posted by lmonter 

Although I do have to admit I'm not the typical American citizen.  I still am fond of the Bill of Rights, I don't expect the gov't to rescue me, and kind of figure we're on our own so to speak.  Hence why I pay attention to things, hunt down like-minded friends when I can, and stockpile.  And, I do have to say, having a nicely stocked pantry/toiletries/medicine cabinet/etc.?  Freakin' rocks when you're laid off because that's one less thing you have to immediately worry about.  Kind of like going back to how things used to be done even back in the 40's and 50's - a lot of folks (especially farmsteads) would stock up on enough food for the year or three, just in case of lean years or bad harvests and so on.  Kinda seems like common sense if you have the space, eh?  If not, again, you work within your constraints and get creative. 

 

Having lost my job last year, I can't tell you how much having food storage helped then and continues to help during those weeks/months when we can't afford to go shopping - my grocery budget is tight but I try to be savvy and stock up on things when they go on super sale.  When strawberries were super cheap last year, my mother and I bought a ton and canned our own strawberry jam.  Saves me $3 every time I open a jar and I relearned some great skills I hadn't used in a while.  It's also important to learn new skills - I just bought a cheap pasta machine and taught myself how to use it this weekend.  Now I can't stop making homemade pasta - it's so easy, cheap and yummy.  You don't have to have a ton of acreage in the country to have a garden.  Try container gardening - even a few tomato plants on an apartment patio will cut costs and help your budget stretch.  Some cities/towns will allow you to have chickens or goats and they will virtually pay for themselves over time.  And make like-minded friends from whom you can learn skills, with whom you can barter, etc. 

I also agree w/ Denvergirlie.  I don't expect any kind of recovery - and if the economy surprises me and completely recovers - great.  Imho there's no harm in getting back to basics, paying off consumer debt as much as possible, making new friends, learning new skills and ways to stretch your budget.

[zebra15]

In my own little bubble the economy isnt looking too good.  Unemployment is still here, I'm trying to stay out of debt but its very difficult.  I am very thankful for my stockpile of non-food items that have kept me going for the past 18 mos or so.  Not having to buy soap, shampoo etc has been a lifesaver.  $5 gas would be a budget killer but $5 gas would save the car from needed to be replaced.  I wouldnt be driving anywhere at those prices.   $5 gas may just bring this teetering economy to its knees.  Gas at that price is going to have ripple effects into every market.  Groceries will increase, serivces will increase.

2011 doesnt look good from where I am sitting but I am doign everything I can to find that job and change my own little world.  Its obvious the folks in Washignton aren't listening so I need to do what I can right here to best benefit myself and my family.

[Ruthiegirl]

My tin hat is firmly in place.    

I see some very serious signs that our economy will sink deeper and lower as more boomers retire, fewer young people can find work, social security bankrupts itself and joblessness outlives unemployment checks.  Or worse, if our creditors suddenly call in our debts.  That would be ugly.  

So, no.  No false sense of security.  No, a tax break and more consumer shopping will not turn this ship around.  I think we are in for a long, hard road of recovery that our politicians have yet to be honest about.  

[annethcz]

The economy in general: I have a hard time believing that the country's economy is going anywhere good. We've taken on massive amounts of debt. Unemployment is high.

That said, our family economy appears to be very healthy. DH's job is stable, he's getting a COL raise effective Jan. 1st. DH's boss is lobbying for a merit-based raise for DH in addition to the COL increase. DH's immediate raise + the social security tax decrease will equate to more than $200 increase in his net compensation each month. I went from SAHM to working part-time in the fall of 2009. My job is secure, and we're able to bank my salary.

My friends and family are also doing well. All of my friends (and their spouses) who want to be employed are employed. I knew a handful of people who lost jobs 2-4 years ago, all of them are now employed in their field. My sister & dad (both engineers) recently found out that the facility they work at will be closed in less than 2 years. While this isn't ideal, both will have the opportunity to keep their jobs by moving to a new location, or will be offered generous severance.

So while I'm not optimistic, my family is doing better than ever, and all of my family and close friends are doing well also.

[justmama]

Ruthiegirl, I agree.  Our politicians just keep assuming that tax breaks will get us spending again and the economy will repair itself.  They refuse to admit that they are on a sinking ship right now.  Hard times are still yet to come.  I dont' have any illusions that 2011 will bring prosperity and peace and happiness for the US.

[Rosebud1]

Just want to add that I too believe that paying for things on credit and through debt cannot continue endlessly.  I was Christmas shopping (where I live in Canada) in a very busy department store.  When I paid the clerk in cash (I use cash because then I know I have the money.....) he looked kind of surprised.  He said that he had been on the register for three hours, and I was only the second customer who paid in cash.  Now I am told that many Canadians use debit cards, but still!  That's pretty crazy!