We're regularly in touch with friends back in the USA as it's pretty easy/cheap with VOIP phone services. Recently, almost everybody is saying local economy has slowed down drastically in the past 2 months. Perhaps the heart of the recession is finally hitting Fortress San Francisco. Amongst the scattering of news:
- Uncle laid off after Toyota shuts down NUMI factory
- Aunt no longer getting paid for lunch & break periods
- Friends working as dental assistants seeing hours cut
- Friends running retail businesses (restaurant, boutique shops, etc) seeing dramatic decrease in customers
- Friends in construction seeing work dry up
- Relatives not finding jobs and going back to school
This local downturn seems to correlate roughly to the passage of the California budget. Spending was drastically cut so much of the safety net people were depending on is gone. Over an entire economic cycle, having a balanced budget is a good plan. Unfortunately, the spending cut over the short term is putting extra downward pressure on the economy.
The optimum scenario would be to have surpluses during boom years and deficit spending during recessions. But it's hard to overcome human nature to save during boom years because when you're in a bubble, it seems like it'll never pop.
(Filed in economics)
Reports from the USA
Posted by Mossy
September 16, 2009 10:24 PM
- Uncle laid off after Toyota shuts down NUMI factory
- Aunt no longer getting paid for lunch & break periods
- Friends working as dental assistants seeing hours cut
- Friends running retail businesses (restaurant, boutique shops, etc) seeing dramatic decrease in customers
- Friends in construction seeing work dry up
- Relatives not finding jobs and going back to school
This local downturn seems to correlate roughly to the passage of the California budget. Spending was drastically cut so much of the safety net people were depending on is gone. Over an entire economic cycle, having a balanced budget is a good plan. Unfortunately, the spending cut over the short term is putting extra downward pressure on the economy.The optimum scenario would be to have surpluses during boom years and deficit spending during recessions. But it's hard to overcome human nature to save during boom years because when you're in a bubble, it seems like it'll never pop.
(Filed in economics)
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