Recession?

Serving in the military often shelters one from some of life’s harsh realities. I’ve shared previously how the military sheltered me for years from the reality that is federal income tax.  In 2020, after my first tax year post military retirement, I had to do some maneuvering as I didn’t withhold properly. Well, I screwed it up again in 2022! More on that next week…

But another area I’m struggling to understand is recession. I hear in the media and read articles that the U.S. may be entering a recession in 2023 but I don’t truly understand what that means. During the “Great Recession” of 2007 – 2009 I was on active duty. We were stationed overseas a large portion of the time and to be honest, I must have missed it!

Even today, within the little bubble of my day-to-day life, I don’t know if I am witnessing visible signs of recession. I hear the news about positive job reports. When out and about I can’t find a place to park at the retail stores and there sure are plenty of folks driving up and down the highways.

Yet, on the downside, my Family does feel the crunch of inflation at the gas pump and everywhere else. I understand at a basic level what the fed is doing with interest rates and slowing the economy to get a grip on said inflation. This is relevant for us as we are currently in the market for a new home. Guess we’ll be paying high interest on the mortgage at least in the near term. I don’t understand all the details, but I clearly see the combined effects federal reserve rate and inflation are having on the markets. The recent turbulence in the stock market is definitely impacting our retirement accounts and unfortunately the 529 college savings accounts that we needed to started tapping last year.

All that being said, the current economic conditions are certainly worrisome but not sure I’d call it bad…yet. I feel very fortunate and blessed to have stable employment and be able to weather the current storm. I think everyone is collectively wondering if we will enter a “Great Recession Part 2” in 2023 and what will that look like? What can we do to prepare? Even if we do go into recession this year, isn’t this the natural course of things? Maybe I need to sit down with my financial planner or read more. Thankfully my son is studying economics, hopefully he’ll be able to break it down to me.

Perhaps my lack of understanding is a good thing, ignorance is bliss. However, to use an old Soldier expression, I sometimes feel like I am walking into an ambush. I think many probably share this fear of the unknown and it’s causing stress in a lot of lives. Many folks have worked very hard to find financial security and it certainly would be tragic to watch it disappear…if indeed that is what a recession would mean.  

In my youth, I used to hear of the hardships my grandparents endured in the aftermath of the Great Depression. Poverty and want to the extreme. I hope if a recession lies ahead, it won’t be that bad, but then again, it’s been almost exactly 100 years. Hopefully history isn’t repeating itself.

There is no point in pegging out the anxiety level. For now, we’ll go about living our daily lives inside each of our bubbles and at the end of the day what will come will come. The average American can do little to shape the global economy, but rather only prepare for the worst. I’ll do what I’ve always done, roll with the punches and put faith in our God that the uncertainty will pass. That being said, if anyone has insights on what to expect for 2023, I’d love to hear them!

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