Are you tired of hearing all the talk about the economic stimulus plan, the bank bailout, the soaring unemployment rate, and all the bad news about the economy? You are not by yourself.

Most people feel that, now that the United States federal government is involved, everything will be ok.

I Completely Disagree

This week we are seeing a reconciled economic stimulus bill pushed through Congress and saw the unveiling of the second part of the bank bailout package presented by Treasury Secretary Tim Geithner. Last week we saw new jobless claims climb to well over 600,000 and the unemployment rate rise to 7.6%.

But I don’t think these government plans will have the major long term positive impact on the economy that President Obama is expecting.

I feel that we are in for a long period of negative growth or, at best, no growth in the economy.

I base that statement on historical statistics. The bottom line is that market forces within the economy are just too powerful to be changed significantly by government action.

Let’s face it. We have experienced a major bubble in the real estate and credit markets, probably the greatest bubble in modern times. There is no way that government intervention can turn the economy around in a short period of time.

Most people agree that the primary factor behind the problems in the current business cycle is the world-wide housing bubble and bust. It has resulted in the most unstable and risky economic environment of modern times.

Let’s Take a Look at the Current Housing Market Compared to Historical Averages

1. Despite a major decline in home prices, the median price of an American home (compared to the median income a family earns) is still 15% above its average level in recent decades. So based upon that fact, homes are still overpriced by 15%.

2. If you pull out the bubble years of 2002 to 2006, houses are overvalued by 20%.

3. But this assumes that median income remains the same. This will not happen as we see rising unemployment numbers and employers cutting back on hours worked and, in some cases, hourly wages.

So if we throw a reduction in median income into the equation, home prices can fall even further.

4. When a bubble bursts, prices don’t come down to an average number. They generally overshoot the average number to the downside.

I Feel That Real Estate Prices Will Continue To Fall

Falling real estate prices are what started this downturn. Home prices could fall at least another 20% on the average. This will result in considerably more bank losses and failures, foreclosures, and bankruptcies followed by reduced personal consumption.

We will continue to see the downturn spread into non-financial industries resulting in even greater unemployment. A massive economic stimulus package and more bank bailouts will not stem this long term momentum. Market forces will win out.

We will not see a true, long term rebound in housing prices until they are allowed to fall to their true value. We will then see prices stabilize and, eventually, start to rise. At that time, the overall economy will begin to recover.

These Are Probably the Worst Economic Times You Have Ever Experienced in Your Life. So What Do You Do?

You may not agree with my analysis. But I think that if you are expecting this economic situation to turn around fairly quickly, in the next year or so, you are just kidding yourself.

I expect unemployment rates to rise and remain at high levels over the next several months and years. Even if you are currently employed, your job could still be in jeopardy someday.

My suggestion is to have a Plan B – a backup plan. This backup plan can have many different forms – a new job or vocation, a second job, a new business, etc.

My recommendation is to consider an internet network marketing business. The internet network marketing industry has historically experienced major growth during economic downturns. Unlimited income potential offers a powerful alternative to that corporate job, particularly if that job is insecure.

The key to success in this industry is to get the best internet network marketing training at a very reasonable cost. You can get the proper training and continue to work your regular job at the same time.

You will then have a strong backup plan in case your income level shrinks.

There are other reasons why I feel that our economy will remain weak and unemployment levels high over the long term. I will discuss these reasons in future articles.

Scott Hubbard has retired from 25 years as a Chief Financial Officer in Corporate America. He now enjoys teaching corporate professionals and network marketers how to apply attraction marketing online and how to generate free qualified MLM leads on the internet.

He is happy to give a free consultation for those having a serious interest in being an entrepreneur. You can reach him toll-free at 877-878-4036 or by email at Scott.Hubbard3@gmail.com. You can learn more about Scott by going to his blog at http://www.YourGuideToRetirement.com.