ECONOMY-GOOD NEWS/BAD NEWS, AND WORSE NEWS

Everyone wants to be optimistic about our country and its economic future for 2009 and beyond, except that future will be tightly controlled and its potential economic improvement is totally in the hands of our government.

"I'm from the government and I am here to help you," is the scariest statement that a business or individual would like to hear.

For instance, just look at the mixed signals sent to us every day by economic gurus, government financial advisers, economists, money advice talk show hosts, TV shows about personal finance and the financial media.

The most conservative financial advisers always suggest that we start a savings program, and they all show how after putting away a few dollars every week, after 20 or 30 years...presto, we will have a few million dollars in savings.

However, the American economy is a consumer driven economy. It is driven by consumer spending which accounts for approximately 70% of the total of the goods and services produced.

Why heck, we drive all the world's economies by what we consume in America, as we buy goods from all countries. American buy anything and everything; have you ever seen a SKYMALL catalog? I did not think I needed a garden thermometer shaped like a caterpillar, made in Sri Lanka until I saw it for only $4.99 in a catalog along with the matching barometer.That folks is called disposable income, and our government wants us to spend it all, otherwise it will spend it for us, on our behalf-hopefully not buying thermometers shaped like caterpillars.

The President wants us to spend more to help the "recovery", and since we are not spending enough, he has taken our money and is spending it for us, apparently for our own good.

Then on the other hand, smart financial advisers tell us to stop all that spending, to cut back in these tough economic times and NOT buy anyhing we do not need, and to save our money.

So, what are we to do? Save, and save for a rainy day, or spend everything we have and maybe more by charging all our purchased on credit cards with 29.9% rates or higher?

Mixed signals, all around.

It can be summed up this way; we spend and borrow when we feel good about the future, and we do not spend, and tend to save when we do not.

So, when will there be a recovery, when will people start to spend buying all those caterlippal shaped theremometers again to revive our retailers and Sri Lankan factories?

Oh, I forgot, the government wants any extra money you may make as the recovery happens, because it has already spent your future money "helping" you recover.

Further complicating the process is the fact that interest rates are at all time lows, so your savings are earning very little sitting in banks, banks that you may be afraid to put your money into, since they may be seized at any time by the government. Buying government bonds and notes is even worse since their interest rates are even lower than the bank rates, and worse yet, you are lending the government your own money which they took from you in the form of new debt left for your children and grandchildren to pay off.

So, spend, or save?, that is the question.....and the good news/bad news.

We asked, and everyone is confused, but remember, when you SAVE, you are doing YOURSELF good, protecting your own interests. When you spend, you may be doing good for the TAMIL rebels in Sri Lanka who sell those caterpillar shaped thermometers you do not really need.