Now’s the Time for Financial Literacy

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Posted: Jun 23, 2022 12:01 AM

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Today it’s clear that the economy is not doing well. Gross domestic product contracted at an annual rate of 1.5% in the first quarter of 2022, according to the U.S. Bureau of Labor Statistics, and inflation is at a 40-year high.What we do know is that consumers are feeling the burden of rising prices, and there are still supply chain issues resulting in shortages or delays of products.How did inflation happen? Well, lots of stimulus money issued over the past two years is chasing the same goods and services, and inflation is the result. The stock market has dropped, and stock volatility is up. The question that we won’t be able to answer for a while is this: Are we going to go through a recession or a depression?According to the Merriam-Webster online dictionary, a recession is “a downward trend in the business cycle, one that is characterized by a decline in production and employment. This trend lowers household income and spending, which consequently causes many businesses and households to delay making large investments or purchases.“But a depression is far different, according to Merriam-Webster, which describes it as “a major downswing (far more severe than a downward trend) in the business cycle; one which is characterized by sha …