The idea that there will be economic recovery for 2009 and we will all be singing “Happy Days are Here Again” is proving to be a myth.

Unemployment is creeping up; jobless benefits for the long time unemployed are drying up; home prices may appear to be bottoming, but there are still folks faced with rising adjustable rate mortgages who may be forced to leave their homes because they can no longer afford the mortgage. For every “bargain” house sold there may be another on the market from the recently unemployed. There are still many homeowners facing declining value of their homes at the same time cities and counties are raising property taxes to pay for services.

Even the experts say the most home prices may increase in value over the next decade will be 6%. There goes the home equity is my wealth idea.

But the problem that is even worse is that our entire economy has been built on consumerism. What causes business owners to hire workers and have more goods manufactured is consumer demand. We used to buy and buy and buy. Now, however, credit card companies are lowering available credit, raising minimum payments or simply not giving credit. With home equity dried up and people either unemployed or afraid that they may be soon, the consumer demand isn’t there. We are saving and or paying down debt. Isn’t that what all the economists told us we should be doing? (Unless you were George W. and then you just urged people to go out and spend.) No, the current administration isn’t much different. Our recovery is supposed to be built on expanding credit. Do you see it? I don’t. Then the stimulus plan was supposed to encourage us to buy or else provide long-term new jobs that would keep us flush with cash to spend. I don’t see that either. I see massive government spending and a falling dollar. China can’t sell us their exports any longer because we are not buying in the numbers we used to buy.

That gives them less incentive to save the dollar by investing in America. The biggest share of consumers when the global recession does end will be the emerging middle class in Latin America, China itself, and India. We in American wielded power because we spent big bucks, even bucks we didn’t own but borrowed. The banks are undoubtedly rationalizing their tight credit policies on defaulting consumer loans and loans to businesses that have gone belly up.

You could look at all of this as bad news. I always choose to look for that pony in the pile of manure. We will need to live closer to the bone. We will have to waste less, spend less and save more. Even then hyperinflation could level us all with prices out of reach of everybody but the very rich. We are talking the price of bread here folks. So we have to re-invent ourselves. The new chic may be he or she who does with less…Thrift stores and big sales will flourish, as will coupon shopping and nesting at home as opposed to going out on the town. There are travel and retirement dreams that will be shelved but maybe we will spend more time together in closer quarters. Multi-generational family homes faded out after World War II when returning soldiers took advantage of the GI bill and VA loans to leave family homes.  Now many young people including college graduates are living with family. Trades such as plumbers, tile layers, and skilled carpenters may once again receive the respect they deserve. We have learned that choosing the white collar life doesn’t always pay off. So we can either fret over how bad things are and how much worse they can get or we can head to the dollar store for supplies come home and   baked bread in the oven. I am busy reading 100 ways to Fix Spam. It really isn’t bad if you fry it with onions and peppers!