Recession Looming

Published February  2008, Top Story

Washington, D.C.—Many experts think that the United States is about to enter a recession. A recession occurs when the whole country’s spending—both the government’s and the citizens’—drops for at least six months in a row.

How does spending less money hurt the economy? When people curtail their spending, companies that sell things don’t make as much money. That may mean companies have to cut jobs, leaving some workers unemployed.

The United States economy is struggling for many reasons. The price people pay for energy to drive cars and heat homes has gone up. The cost of food has increased. People are spending more money on necessities, giving them less to spend on extras like new clothes or eating out.

But the weakened economy also results from poor choices. Many Americans spend more money than they make each year. The average family carries over $2000 in credit card debt. Some people borrowed more money than they could afford when buying homes. Now they can’t pay back that borrowed money.

In January, President Bush introduced an economic stimulus plan. A stimulus is something that causes action. In this case, the stimulus is money. President Bush’s plan calls for $150 billion (total) to be returned to U.S. taxpayers and businesses. If people spend money, it could keep companies in business and people employed.

Newsthink

Editorial by Jenny Pitcock

Some experts think President Bush’s economic stimulus plan is a good idea. If people get a little extra money unexpectedly, it will make them feel good. Many will go out and spend the money, improving the economy.

But others think President Bush’s plan won’t work. They think the plan may hold off the recession for a few months but won’t stop it from coming eventually.

And where’s that $150 billion to fund the economic stimulus plan coming from, anyway? From tax dollars—paid to the government by the very same people who would be getting the money back.

That seems reasonable. Why shouldn’t hardworking taxpayers see a little bit more of their own money?

Big Budget

Well, for one thing, the government doesn’t have extra money to be spreading around. President Bush announced a $3 trillion budget plan for the next year. That would make it the biggest budget in U.S. history. The United States is already $9 trillion in debt. If Congress approves it, the 2009 budget sets the government up to spend $400 billion more than it has at its disposal. The money will have to be borrowed from other parts of the budget or from other countries.

Even good governments are not perfect—they are made up of humans, and like the people who run them, they have flaws. In this case, spending more money than we have as a country seems irresponsible—and at some point, it will have to be paid back.

Money-Wise

Lots of different things can cause recessions—wars, the increasing cost of things we need to live, less need for workers because machines can do the same work more quickly and cheaply.

The possible looming recession can be blamed on a number of factors. We can place blame partly on individuals who cannot afford the homes they bought or who ran up large credit card bills they couldn’t pay.

How do you handle money? When you get money, does it “burn a hole in your pocket”? Can you not rest until you’ve spent it? Do you find yourself asking for advances on your allowance? When you see something you want, do you feel like you have to have it right now?

Or maybe you like to save—so much that you don’t like to spend money on gifts for other people or giving to your church or missions.

Whose Money Is It, Anyway?

What does the Bible say about spending? God expects us to manage our money the same way we’re to manage other gifts he gives to us—our time, health, talents.

The answer comes down to stewardship. Stewardship means that as Christians, nothing belongs to us. We are stewards or caretakers of ourselves and the things in our control. But ultimately, everything we possess belongs to God.

When we think our money belongs to us, we’re more likely to use it unwisely. If you get into the habit of questioning whether your purchases please God, you’re less likely to blow all your money on yourself . . . or to put a penny in the offering plate while keeping $10 to spend on yourself . . . or to spend $400 billion you do not have.