If we are entering a "Depression" describing it as a "New Depression" is very appropriate terminology.  A Depression in the 3rd milenium would be brought about by completely different reasons than the original Great Depression.  Although there are many exceptions, many of those facing foreclosure are in that position due to abandonment of the basic rules of lending:  (A) A good credit rating (B) A required down-payment (C) A satisfactory "debt-to-income" ratio.  In researching this issue, it is clear that many of the big lenders were underwriting home loans that did not fit these traditional practices for safe lending, and the borrowers were happy to accept a loan under these conditions.  The "New" loan underwriting practices have included components of the following:  loan balances in excess of 100% of the appraised value of the property; loans that accept initial payments that only amount to partial payments on interest and no decrease in the principal balance (in other words "negative" amoritzation"); loans that do not start with some "ownership equity" in the property; for heavens sake how naive is that?  If there is nothing to loose (no equity or investment in the property for the owners), there is no reason not to walk away from the property and simply accept foreclosure when the going gets tough.  In the 2nd millenium, borrowers were embarrased by the threat of foreclosure or bankruptcy, and their inability to pay.  Today, many borrowers and the lending institutions as well, expect a government bailout. and do not accept personal responsibility.    Lenders should be responsible to lend responsibly to borrowers who have established an acceptable credit history, have made a personal monetary investment in the property, and have the ability to repay.  Borrowers should enter into a mortgage contract with the intent to be responsible for their obligation.  It is to easy to think that others have a responsibility to "bail" us out or that we are "entitled" to be taken care of.  Personal responsibility for our actions and financial obligations is paramont to a strong nation.  Individuals who are are "returning to gardening, raising their own meat, canning, etc. are individuals who have likely  always accepted personal responsibility and are not likely to be counted amoung those responsible for having created the current financial worries faced by our country and its citizens.

The recession began in Michigan way before the rest of the nation. I am optimistic that things will turn for the better...they have to sometime. It's the cyclic nature of economics. besides, I want dh's wages to get back to where they were! "-Quote-CinnamonHuskies

 I too am in Michigan and I agree it hit here way before anyone else and it doesn't seem to be getting any better. I moved here from a small town in East Tennessee where the jobs were limited, very limited, to the suburbs outside of Detroit and I thought I'd find a job with my degree and that the whole world would open up and my sister who lives in Colorado said, "Why would you go back to Michigan there's no jobs there." That was four years ago...and interview after useless interview and worthless low-paying job after the other I've noticed that alot of people have lost their homes/jobs and the overwhelming feeling of drowning is an everyday thing here. People that own theyr're own homes but who can't sell them so they can move out of state or who lose their homes whose jobs dried up and went overseas or now as many local businesses are going out of business...with the schools closing down in Detroit, and the social services offices having to not only taking on more and more people who need assistance but who have to consolidate their services for numerous cities...some up to 10 cities with all those people...so they're overwhelmed and so is the system...so instead of receiving enough food stamps to feed a family of four, you recieve enough for a family of 2, why? It's being split with another family...when in the past a family of four could eat comfortably. Because I live not far from Detroit, I see alot of changes than when I was growing up in Detroit. The police stations have closed down or consolidated, and like I said before...people are moving away. The local craigslist has people selling everything they own for money either to pay their bills or to move out of state...people are even selling their plants in their yards. Its crazy.

 I disagree about poor people still being able to afford luxuries...(this is my personal observation), when I see someone still buying luxuries they are often the younger groups without children from what I've seen. Alot of younger people are living at home while many of us went out on our own and got our own apartments/homes, alot of young adults are still living with mom/dad and can afford to shop for luxuries. I don't see very many parents either nuclear or single parent homes that can spend on luxuries unless its budgeted. I am a single mom, my friend is a single mom of three, and my sister's friend is a single mom of two, and my sister-n-law is a single mom of two...even my sister and her husband and their two kids...my sister works two jobs and her husband, a vet, works one and recieves disability from the Army and they can't just got out and buy what they want, they have to budget for it. I do go into stores like Walmart and see younger people in their early 20's without kids who seem to have disposable money that can buy like that. But, I am low income and I can't...I do have cable and the internet...it would cost me MORE to cut off the cable vs. keeping it...thanks to my cable company. I feel the internet is a necessity for me and it cost me $98 a month for both cable/internet. If I were to cut off the cable it would cost me $55 a month-(that's not including all the taxes which would probably be about $13-so $68 guesstimate)-but they would also charge me a one time fee of $55 to come out and separate the modems for the internet only. But I can't go and buy a new outfit, I can't buy a Wii for my daughter or anything like that, I buy the basics...my money goes to bills/food. My daughter does have a Ninetindo 2 but her dad bought that, one of the few things he has done...and he also bought her a large inflatable pool, this was all last year and after 11 yrs of nothing, she deserved at least that. My daughter has a MP3 player but she bought it herself at Walgreens on sale for $5-(originally priced at $50) and she has a Ninetindo DS but she saved up her money to buy it and I just buy the games which range around $30 to $40.  Occasionally I'll buy a video or something we need-(like my daughter is at camp, so I had to buy shoes/toiletries/pjs etc. for camp)- but for me to just go buy something... that's rare...but that's what I've noticed when I've shopped that alot of younger lower income-(working)-adults were the ones buying the 'stuff'.

Brandy- I spent 12 years working with very poor peole in the mental health system- it was always the highest priority for parents to get a nintendo for their kids.  I have been in many apts with little cothing, food, furniture, anything, but a nintendo.  I remember one two bedroom apt for 7 people in the living room was a couch, TV stand, small TV and nintendo, nothing else. I asked parents several times why they bought them, and the answer was always the same.  To keep the kids, esp. preteens, off the dangerous streets and out of gangs,  They did not watn their kids playing with friends outside, and didn't want their kids to want to go out. 

I  haven't questioned it since, I guess I feel that a low income lifestyle is examining every dollar, it's not mindlessly going out and dropping "too much" on a toy for kids, for many parents it is very comforting to have the kids on the couch or floor playing a game, rather than worrying about them.  This is true also for latchkey kids, they are often content playing a game until mom gets home.  Whereas you might be able to call an upper class kid on their phone, an inner city child doesn't have this.  It's easier to spent the money once and have it.  The family is also saving money on afterschool programs, afterschool daycare, other care out of their reach by buying a game.  These kids are not spending on sports, clubs, programs, they are going home and playing a game or two.  It is a good gift for grandma to buy a new game for Christmas or a birthday, parents usually can't afford them. 

Is it a luxury?  I would say maybe not.   

Tracy,

What you say brings up the difference between surviving and thriving in my opinion. What I have been talking about is survival, for survival only the basics are needed, the things one would die without. I believe in a depression people will struggle to survive and indeed some are now and there will always be those who do. What I see going on around me are people finding it harder or very difficult to thrive. As long as we as a country are surviving and somewhat thriving...we are far better off than generations before us and our quality of life is still higher than some in many other countries.

This next comment is to all,

This is the last statement I make in this discussion and I don't believe I will be participating in any more like it because I have had quite enough of it. I think we all agree that our nation is in a time of change and difficulty. Discussing whether it is or is not a depression makes not a bit of difference in bettering our lives. I do think that traveling this road over and over adds to the stress and depression of those who are having harder times.

By all means, if any of you who post here are struggling financially with the difficult situations that are happening around the country, do share your troubles. It does help to vent frustrations and it helps to receive support. We all need that from time to time.

But let us not hammer in the nails to the coffin of hope. This community has been one full of friends sharing their lives and wisdom with each other. Let's keep it the place of warmth, light and positive action that it has been.

So with that I ask, what can we do for ourselves today to do the best we can for our families financially and what can we do to help each other thrive today?

If you choose, please continue to participate. We'd love to have you. And I agree, we need to continue to have hope. I think that's why I'm working so hard on gardening for the hope and control over my environment aspect. We definately shouldn't believe that with whatever happens we won't survive. We are survivors, we're adapters...

I think its a difference in reading about what happened in the past and living it, or even a resemblence to it, you either crumple or thrive and I think just being on this website with more and more people looking to save, is showing that we are learning, some faster than others. Its funny how time loops, ya know. I'm sure the Great Depression was named so but there were many other depressions prior to it and I think we're just looping around again, and having to relearn lessons we forgot. I think its teaching us not to be so dependant on material things. Like Buddha taught, "all things are impermanent." So, we need to re-evaluate our values, that's the lesson I'm taking from this situation. Whats more important is living and the people you connect with along the way and not having the latest car or the biggest house...

In my opinion I don't think this country is in full blown depression yet.  I think a lot of it has to do with people personal tastes and lifestyles they are currently accustome (sp?) to and have to "downgrade" to something less.  So be it right now if you have to switch from buying your clothes at Macy's to buying clothes at Wal-Mart.  That is not a crisis.  But to some people it is.  I don't think it is a true depression until I can no longer afford to feed my children, provide mediacal check ups for them or cloth them.  The day my dh and I can no longer afford to put dinner on the table is a crisis then.  But just because my children will wear wal-mart shoes to school this year verses a new pair of nikes is not a depression just a fianicial adjustment at this time in our lives.  People also  have different versions of luxurys as well.  A luxury to me maybe "old school" to some else.

Jenn

I don't think the header question should be "Are we entering a Depression, but, why "shouldn't" we be?"  We've got so much more than other countries, mainly because we keep giving ourselves raises, thereby inflating our sense of importance and worth.  Why do you honestly think illegal aliens keep coming here?  If the money wasn't so good, they'd stay home!  The majority of the world lives without TV, phones, refridgerators, tap water, electricity, good schools and easily accessible medical care, quality clothing at the drop of a credit card, AC, cars, cheap oil, and peace.  Yet, here we are, in the richest country on the face of the planet, and we are miserable?  Why?  Because we can't have what we want when we want it at a price we are willing to pay?  And then we have the nerve to wonder why the rest of the world resents us so very much.  Because they are thinking, like us with our more affluent neighbors, if only I could get what they have.... what I would/could do with that!  Neither do they see the dark underside of way too much money for your own good.  It's not that they don't want to work.  Its because they don't wan to work for less when they can get more for the same amount of work, just like we do.  We're inflating the world by our wealth.

 If America had a reset button, we could reset this ridiculous raising of wages.  Nobody stops to think, more money available, more prices go up.  Nobody gets a free lunch, folks.  Envious of those CEO's who make bazilions?  Think of the outcaste woman cleaning toilets with her bare hands and no protective clothing in India.  She gets what amounts to .50 a day for cleaning ten filthy "outhouse" type toilets.  How far does that go if you HAD to live on it?  Then think, how much YOU spend on gas to troll your butt around town w/o thinking about her.  She is envious of YOU.... IF she could comprehend the cash in your gas tank at any given moment.  Don't get mad.  Just throw a check at the problem.  That's the extent of our collective compassion conscience, otherwise known as our International Foreign Policy.

People are put into induced comas all the time, to avert organ catastrophy or to thwart disease.  Same thing as halving salaries with prices following to come more in line with other nations.  So, I agree.  The ringing mantra of this country's politicians should be ---STOP WHINING.

I know, I know.  Here she is, sitting down at her fancy laptop in her nice, paid for house, beating US over the head for our sins.  The hypocrite.  I couldn't agree with you more.  This forum has a way of helping me, as well as others, see what we really look like, doesn't it?  No wonder I always hated that story about the Emperor with no clothes.

 A quote from the Sunday paper here, on "The Economy, How Bad Can It Get," taken from the Wall Steet Journal-

"This financial crisis is the worst since the Great depression," Points out NYU economist Nouriel Roubini.  "The recession is unavoidable at this point."

Other facts- 435,000 jobs lost since the beginning of the year.

A table to look at-  currently our umemployment rate is 5.5%. 

Compare the falling dollar to the trends then, I think I have definite cause for concern.

To answer Brandy's concern, about news like this pulling us down, I would say that there are several comforting areas to look at-

Many households are two income, softening the blow of a job loss.  We have lots of stuff- I don't think anyone in America would need to buy clothes, housewares, cars, durable goods for a few years and we would be fine.  The acculation of "stuff" might end up being a saving grace.  Most importantly, the social program are in place to ensure that people don't starve, and hopefully keep people housed and transported.  A question I have is how are we going to absorb the heating costs for this winter?  We also do not have the family interdependence that was a safey net. 

I look at the graph and see us having issues.  On a personal note, dh started his job last Monday- yeah!  But I won't be comfortable unless I see the US creating jobs to replace those it has lost so far, and ensuring we don't go in a slide based on lessened global demand and the falling dollar, the Dow starts turning around and replacing some of the retirement funds we've lost so far, and we find a way to cut our dependence on imported energy.

Some things I plan to do- try to be more independent for food, continue to look for a job I can do at night, decreasing the reliance on one breadwinner,  continue to clean and inventory and keep items in good shape for household use- with six girls, the amount of clothing I need is mostly underwear and socks for the youngest 4-some of the clothes in use for the kids are on the 4th or fifth person- one swimsuit handed down from friends is on it's 8th girl! , look for ways to cut down on utility costs. I think I'll be trying to have as green and recycled Christmas this year as possible, which helps a lot on costs. 

I'll step off my sopabox!