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10 Good Things About A Recession
Read about some positive attributes to be found in this looming recession.
by Natasha D. Smith
November 6, 2008
W
hat comes to mind when you hear the word RECESSION? Many of us are tempted to spew
out answers such as foreclosures, layoffs, and that dreaded four-letter, D-word ... DEBT. But don't
start grinding your teeth just yet. There's actually an upside to this sagging economy.
AW
encourages you to focus on the positive results that come from a recession. So, read on for
10 good things about difficult economic times. Then, feel free to post a comment, and let us know
some of the good things that you can find, even during a looming recession.
1. Money in FDIC Insured Bank Accounts Is Safer
For those of you pulling your money out of the stock market and stashing the cash into FDIC
insured bank accounts, you'll find that your money is even safer. Congress has temporarily
increased FDIC deposit insurance from $100,000 to $250,000 per depositor. And, each depositor is
insured up to $250,000 per bank. So that means your checking accounts, negotiable order of
withdrawal and savings accounts, money market deposit accounts, and certificates of deposit (CDs)
at insured banks are all protected under this new rule. No depositor has ever lost a penny of
FDIC-insured money. Plus, you have plenty of time to decide what your next move will be if Wall
Street is still too tumultuous for your comfort level. The new limitations will last through Dec.
31, 2009.
2. Lower Interest Rates
Right now, interest rates are at some of the lowest levels seen in years. That means it's
cheaper to borrow money for your businesses, your homes and your cars. At the end of October 2008,
we saw the central bank slash the target federal funds rate - the rate banks charge each other for
overnight loans - to 1 percent. And some economists are guessing that this rate hasn't reached its
bottom. So if you're thinking of applying for a loan, now is one of the cheapest times to borrow
some cash.
3. Cheaper Gas
Gasoline prices are falling - FAST! At the time this article was penned, the average price
for a gallon of regular in Georgia sat at $2.41, according to AAA. That's certainly better than
just one month before when the average was an astounding $3.92 per gallon. In fact, gasoline prices
in Georgia are 41 cents lower than one year ago. You get the idea. With fears of a recession in the
United States still going strong, oil prices keep dropping. And for many, falling prices mean a
fuller tank as drivers take advantage of continually decreasing prices at the pump.
4. Falling Home Prices
Now wait a minute. We know what some of you might be thinking. "How can the decreasing value
of homes and a struggling real estate market be a good thing?" But for house hunters who are
looking to get their first homes or simply looking to upgrade to a better one, now may be a great
time to consider purchasing that dream house. In just the past year, average home prices have
fallen a record 16.6 percent, according to the S&P/Case-Shiller Home Price Indices. Here in
Atlanta, home prices have sagged this year by 8.5 percent. And some economists predict that prices
will continue to fall. But take heart. That can be great news for those of you looking to relocate
your businesses. In most major American cities, real estate is the cheapest it's been in years, and
now may be the time to buy up some of that cheap property.
5. A Greater Sense of Financial Responsibility
Sometimes a little fear can prompt prudent behavior. And worries about a looming recession
often encourage people to become more careful with their finances. In an economic downturn, people
tend to pay more attention to the household cash flow. Bad spending habits are examined. Saving
becomes a top priority. People often take the time to figure out how to live within their means. So
you see, the threat of a recession just may be that kick in the pants needed to get serious about a
more secure financial future.
6. More Holiday Shopping Bargains
The holidays are just around the corner. And you know what that means: holiday shopping. This
year, economists say the season will bring even more bargains. Experts predict this holiday
shopping season will be sluggish. The National Retail Federation estimates just a 2.2 percent
increase in retail sales. That's compared with the average yearly increase of 4.4 percent. But
there's a brighter side to those lackluster numbers. Many economists say large retailers such as
Sears and Walmart are trying to tempt shoppers with deep discounts and super sales. Not convinced?
Then consider a Kenmore washer-dryer set for $600 instead of at least $900 for just the washing
machine, 60 percent-off clothing or how about a flat-screen TV for 30 percent less? These are just
a few of the deals Sears says it will offer this holiday season.
7. Healthier Habits
Does a financial downturn have positive effects on your health? Well, during times of a
recession, many people tend to pick up healthier habits. Families often curb the number of times a
week they eat out. Many choose cheaper, healthier home-cooked meals. And others, who may be out of
work, can finally start using that expensive gym membership before it expires. After all, exercise
is a great mechanism to relieve stress, something that's certainly more prevalent these days.
8. More Eco-Friendly Habits
Some environmentalists suggest that recessions are good for the ecosystem. Just think about
it. In financially hard times, many drivers tend to use their cars less and depend more on public
transportation. Less driving means a smaller carbon footprint. And the list goes on. In economic
downturns, consumers save more and waste less, fewer environmentally hazardous items such as mobile
phones are sold and sales of gas-guzzling SUVs drop. Need we say more?
9. More Family Time
Family dinners, movies at home, and game time are much cheaper alternatives to a night on the
town. And experts say family time at home can foster healthier relationships. Research shows that
more time with your loved ones can prompt better communication and ward off teen eating disorders
and substance abuse. Certainly spending time with the family can encourage more positive
interaction. So, is anyone for a game of Monopoly?
10. Political Awareness in Washington
Polls show the economy remains issue No. 1 in American homes. And that's forcing politicians
in Washington to take notice. The economy proved to be the most powerful topic in this year's
presidential race as both candidates spelled out their plans to jump-start the slowing economy. The
looming recession has sparked talks in Washington of another stimulus package, tax cuts and several
types of government financial aid. Nearly all the seats in Congress were open in 2008. So trust us,
leaders in Washington are listening to the economic concerns of Americans.
Natasha D. Smith is a contributing writer for AtlantaWomanMag.com and is a broadcast news writer at WNBC at Rockefeller Center in New York City. Before joining WNBC, Smith was a producer/writer for News 12 New Jersey and an associate producer for CNN International in Atlanta.
