The De-Leveraging of America from Consumer to Saver - Producer

We are going to go thru some hard times. It will be good and not good. This is changing the USA into a different country. Some of the changes are not good. The march to socialism is just evil. Led by men and women who do either do not know what they are doing or they are insidious conspiritors who are trying to make America into a communistic form of government. I hope it's the former, I can understand stupidity, I fear it's the latter.

What this means is as the playing field is leveled some will prosper and some will fail. For those who know how to make it work, let's hope for prosperity.

One thing is certain, our children and our children's children will be better for this. The bad lessons of the past will be unlearned. No one after the Great Depression was over longed for the Roaring 20's. That to them was a bad dream they didn't want to relive. They had taken the punishment, or better said, their children had taken the punishment and now it was time to build again. This article says much:

K. Esther Szabo was a small child when the recession of the early 1970s sent her family's fortunes into a tailspin. Her father, an economist, struggled to find work, and her mother worried about paying the bills. The family eventually filed bankruptcy.

The tensions at home put a permanent mark on Ms. Szabo. To help her family, she started working at age 8, doing chores for neighbors, and has been working ever since. When a personal-finance class in college introduced her to the idea that calamities like the one that crippled her family could be avoided with careful planning, she found the idea "mind-blowing," she says. She now co-owns a Los Altos, Calif., financial-planning firm.

In this current recession, we may be creating a new generation of Ms. Szabos. Economic downturns leave enduring marks on the career prospects and aspirations of children. Some youngsters will face lasting setbacks, while others will emerge more focused and motivated, based on studies of past recessions. The outcome depends partly on a child's age, on the example set by parents, and on whether young people can be empowered somehow to help their families through the crisis.

College students may be among the hardest-hit. Graduates who entered the job market in the recession of the early 1980s made significantly less money for at least a decade, compared with those who graduated in more prosperous times, says a study by Yale University's Lisa Kahn. Another study, a 21-year look at 39,000 father-son pairs published last year in the Journal of Labor Economics, found sons whose fathers were laid off had annual earnings 9% lower than comparable youths whose fathers kept their jobs. Recession-era grads also tended to remain stuck in lower-prestige jobs, even after the economy recovered, Dr. Kahn found. While the reasons aren't clear, some may have invested too much in their original jobs to try to move to a more prestigious job and start anew when the economy picked up. Others may have felt loyalty to the employers that harbored them in hard times.

Small children, too, are vulnerable psychologically in ways that shape their aspirations. Glen Elder, a professor of sociology at the University of North Carolina, found in studies of the Great Depression that the self-image of small children of that era was shaped by the morale of their same-sex parent. Amid the traditional gender roles of the time, young boys suffered most, from seeing their fathers deprived of work and a sense of identity, says Dr. Elder, author of "Children of the Great Depression." Because preschoolers and pre-teens were too young to understand the causes or to help out financially, they risked growing up with "a lack of initiative, of confidence, of self-efficacy," he says.

Those who fared best, Dr. Elder says, were teenagers when the downturn hit -- young enough to avoid the worst blows, but old enough to work for pay. "They were in an opportune time ... to pick up some of the lessons of the period," he says. Depression-era hardships also led youths from hard-hit families to grow up faster; many committed to a vocation shortly after high school, earlier than offspring of more prosperous families.

Past isn't necessarily prologue, of course. Also, applying the lessons of the past will be hard; kids today who try to find work face tall hurdles, with teen employment hitting new lows, says Andrew Sum, director of Northeastern University's Center for Labor Market Studies.

Nevertheless, parents are already finding lessons in the current troubles. Based on a study of 77 white-collar layoff victims published last year in the journal Social Forces, jobless parents are urging children to equip themselves to survive hard times, by developing transferable skills or learning to be entrepreneurs.

With luck, many youngsters will take the cue. "It's a joy for me," says Ms. Szabo, the financial planner, "when I help people see they don't have to be a victim" of a bad economy. A big reward, she adds, is seeing anxious customers leave her office with renewed confidence in their plans for the future.


To help kids cope during a downturn:

* Include children in planning solutions.
* Give kids a way to help out by doing chores or taking part-time jobs.
* Explain the crisis in age-appropriate terms.
* Set an example of hopefulness and resiliency.

We will be like those leaving Egypt, like the people crossing into the promised land, like Lot's family leaving Sodom, we will not look back in longing. We will not pine for the past. We will live in and look toward the future.