Hit by the Great Recession

“THE worst economy in a generation.” That is how Encyclopædia Britannica Online described the recession that hit the world recently. The economic downturn that started in the United States in 2007 has been so severe and has affected so many countries that it has been given a unique name, the Great Recession.

What caused it? Newsweek magazine put the answer simply: “A frenzy of irresponsible borrowing.” But why the frenzy to borrow on credit, to buy things for which people are unable to pay?

You will likely agree that the world’s economic system, which cultivates greed, did precisely that. The message was, in effect: “Buy! Buy! Buy!” whether you can pay for it or not. “A generation has learned the hard way the dangers of borrowing too much,” explains economist Chris Farrell in his book The New Frugality.

Many countries were sent reeling from the blow of the Great Recession. “Despite signs of recovery,” stated a front-page headline of the South African newspaper Sunday Times last year, “consumers . . . are still struggling to put food on the table.” The newspaper reports that “almost 3 000 000 consumers [in South Africa] are more than three months in arrears on their bills; and about 250 000 middle-income earners have lost their jobs in the past two years.”

Job losses have numbered into the tens of millions in recent years. As for reports of signs of recovery in the United States, the Financial Times quipped: “The recovery since June 2009 could be called the ‘Great Disappointment.’” The paper added: “Many economists think that the need to pay down debt will hold back consumption growth for several years to come.”

If you are a victim of the Great Recession, no doubt you can relate to what author David Beart wrote in an essay: “It seems there is a lot of discussion about the world’s financial problems, but little information offered about how to solve these issues.”

The following articles have been designed to help people struggling with debt. These questions will be considered: What are the benefits of saving? What can you do if you are in debt? How can you learn to manage your money better?