Here are the 3 scenarios that are possible for the economy:

A. The economy bounces back more quickly then expected…and much of what has happened has been panic driven overreaction. The market recognizes this and reverses sharply to the upside, with it there is an acceleration in job hiring and people buying homes.

B. We are closer to the bottom, things will be about where they are for 2009 and the economy recovers in 2010.

C. We have a good bit more to go downward – many more people will lose their jobs and houses. Many who keep their jobs will be forced to take a pay cut. We don’t see recovery until 2011 or after.

I obviously don’t know the future, but I think the rosier scenario of A is highly unlikely. My take is that we will be somewhere between B and C as the dominoes continue to fall, but I wouldn’t rule anything out.

So what do we do now?

  1. If you haven’t already, I recommend reducing expenses. Luxury items should be few and far between (if at all) from now till we have recovery. For sure there should be no luxury expenses if your emergency fund isn’t up to 6 months of essential expenses or if you have non-mortgage debt or if you aren’t prepared to help your brother/sister pay their mortgage payment/rent. Basically we should reduce expenses to build up emergency funds, and then aggressively pay down all non-mortgage debt. Do not aggressively pay down debt if you don’t have anything in reserve. Build reserves first.
  2. For those who have a little more resources, keep in mind that there is responsibility to live in such a way that would enable you to help others in our church family and beyond if they lost their job or were on the verge of losing their house. I am not saying that things will get to a serious depression level, but if they do then we need to be mentally prepared for families to live together and share expenses.
  3. Most importantly understand that though the economy is in rough shape our God is still God. He is our Provider. Perhaps it is even an opportunity for Jesus’ church in the U.S.A to learn to give out of sacrifice and not just out of abundance. (I am speaking from a macro-perspective here. Many individuals give out of sacrifice.)
  4. As people’s illusions of security are broken down they are often more open to the security God offers through Jesus. We can take this time as an opportunity to be more diligent in sharing the Gospel.