Do you expect the economy, particularly employment, to improve in 2009?

[Anonymous]

There is a school of thought that says inventories are at all time lows, and although people are deferring big ticket purchase and preserving their cash/paying down debt, once they can no long put off purchases the manufacturing employment will increase quickly.

Another school of thought says so many consumers are upside down on their debt (cars and houses worth less than the loans on them) that it could be a few years before the recession eases.

What do you think?

[Anonymous]

I believe it's going to take a few years to get out of this mess.

[Anonymous]

If it is going to be a few years, what are you doing differently with your personal finances?

[Anonymous]

I agree with a PP -- several years.

People who do not have access to credit anymore simply don't have the money to buy things anymore.

Especially if they have lost their jobs.

People will simply be doing without, if they can't afford to pay for something with cash, and for some the adjustment will not be easy.

[Anonymous]

Even if purchasing starts up again because people cannot delay purchasing big-ticket items like cars, it's like turning an ocean liner to get manufacturing re-started. So many businesses will have cut back production or gone out of business by the time demand for their product returns that getting those or new businesses started to meet the new demand will take years.

I think this recession is here to stay. The hope of the Obama plan is to keep the economy afloat before the tipping point of so many jobs lost that the downward spiral of cutting jobs/cutting production/consumer spending dropping spins completely out of control and we have another Great Depression.

When you build an economy based on borrowed money, a crash is inevitable. This one is going to be long and ugly unless Obama fills the country with optimism, and suddenly people stop worrying about losing their jobs and start spending. It's possible, but unlikely.

[Anonymous]

I worked for a consulting firm in 1990. When the downturn hit, they said "there are two schools of thought on how it can affect consulting. One school says business will slow down, and the other says that consultants are even more necessary in a downturn". Well, you can guess which school was right.

Since then, I have heard many other "two schools" arguments made at work. After tallying which school came out on top, I have come to conclude that whenever someone talks about two schools, one school is the one everyone expects is true, and the other is wishful thinking.