Thursday, June 21, 2012

Daily Briefing for Thursday, June 21, 2012

Scenes From Athens

As one of the cradles of civilization continues to seek yet another payday loan, food lines in Athens grow geometrically.  Read this article, checking out the images of those in food lines getting their handouts.

Here's my question for you to ponder.  Could something like that happen in the United States?  While I don't have a good answer myself, I think it's rather naive to dismiss the risk out of hand.

We've seen it here before, during the Depression.  Look at some of these images from that time in our history.  Food lines, foreclosures, starvation, high unemployment - many of the things you see in Greece today actually happened here.  Of course, our economy has changed dramatically since then, with a complex system of social insurance (Medicare, Medicaid, and Social Security for example) which would, normally, serve as a safety net for such an event. 

Of course, that begs the question: are our safety nets financially strong enough to sustain a large number of people in a severe economic downdraft?  I don't have the data handy to make the point, but the last figures I saw, we have well over 50 trillion in unfunded liabilities for such programs...meaning there ain't any money to fund these programs long term.

Friends, I don't know how bad things could get, and I am always skeptical of those who profess an ability to predict with any precision what will likely happen.  I would simply ask you to look at those pictures above, both from the Depression and from modern day Athens, and then ask yourself,  how would my family fare under such circumstances, and what can I do today to protect against that?

All of us would rather spend time and money doing something fun rather than preparing for economic hardship.  Yet I would submit that is some of our problem, as a nation - we seek instant gratification.  In doing so, we overextend our finances, buy crap we don't need, run up gargantuan sums of debt, and then act surprised when Congress does the same thing with our nation's finances.

It's not always fun being prudent.  It's sometimes boring.  But boring can be good.  Especially if it puts you and your family in a better position. 

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