A Fair Economic Warning

Well friends, all over the news there are mumblings and whispers that the economy is starting to show signs of life and that our current recession may actually begin to right itself by the end of the year. The experts use statistics like the fact that massive layoffs are down and companies aren't losing as much money as they thought. Basically, there are silver linings to all the grey clouds above our heads.

And to this, I'd like to warn you. Sure this past Memorial Day weekend retailers saw an upswing in consumer confidence. However, one thing that is mysteriously missing from these experts is any talk of the timing of this upswing. It is not that Americans are making more money than we were a few months ago, the national unemployment rate is still hovering around 10%. The biggest factor for the recent economic upswing has everything to do with federal taxes. The Memorial Day weekend came at the time that most Americans who filed Federal taxes, and even those in government who forgot to, are receiving their rebates, thus Americans have some spending cash that they have earmarked for their summer.

Take myself for example. My family income has not changed since February. However, upon receiving our tax check, after paying all necessary bills and the surprise car fix, we had bought season passes to our local Six Flags theme park while they were inexpensive. Our Memorial Day consisted of going to Six Flags and then going to our local minor league baseball game. Total cost for the day, maybe $40 dollars for a family of three, and that includes buying tickets for our guest at the baseball game.

The talk of massive layoffs being slowed is an obvious comment and shouldn't make anyone really feel comfortable for two reasons: 1) there aren't any massive hiring and 2) State and local governments are in the midst of laying off hundreds of employees for financial reasons. So before you buy into this whole "We are getting better" mantra that the government is selling, you need to think about the surrounding factors.