Over the past couple of months, the economy has caused the whole nation to be more frugal with their everyday spending. The economic plunge is believed to be the result of a multiple of things, according to economic experts.
Associate Professor of Economics from Elizabethtown College, Dr. Sanjay Paul believes it is because of “insufficient lending practices of financial institutions”. These institutions, such as Fannie Mae and will make money available for mortgage lending. These high-risk loans that are given out are called “sub-prime” mortgages. As a result of the borrowers, borrowing too much, they defaulted on their mortgages and could not continue making payments. This resulted in the collateral being the houses, often leading to auctioning or foreclosure.
To cut down, many people have eliminated everyday things from their shopping lists. With the holiday season coming up, it may be even harder for people to spend money on gifts for their loved ones. Car sales are ending leases and going up because of it being harder to get exports. Even companies such as Apple have dropped production. Their product, the new and improved Iphone 3G will lessen production by about 40% in the next quarter according to analysts for Apple. Consequently, Apple’s stocks are down 40% from its level three months ago, according to an article found at MarketWatch.com.
We are also cutting down on spending on groceries, traveling, and energy. “Americans, perhaps more than other countries, have not been efficient users of energy and have been reluctant to eat more meals at home/shop at less than full service grocery stores, cut coupons,”says Assistant Professor of Economics at Elizabethtown College, Dr. Scheidling. “There is a great deal of evidence that consumers are doing these things.”
The future of the economy is yet to be determined. However, Dr. Scheidling says that economists have predicted that it will be in the 3rd or 4th quarter of 2009 that the recession has ended. “Firms are not sure when the demand will pick up, so they are cutting back on hiring people, “ said Dr. Paul. “Unless government spending picks up the slack, we are in for a long recession.”
To understand the nation’s economy and why it has ended up in such a terrible state, it is important to know about the region around you and what they might be facing. Businesses in the Elizabethtown area, such as Salon Bella, currently with a for lease sign outside its window and vacant inside are starting to feel the heat. The Beef and Beef is another shop in town that has gone under because of economic troubles. As for the education expenses in the town of Elizabethtown, “Spending on schools may take a hit,” said Sanjay. Colleges and schools have had less money coming in and more financial aid being given out. “As students and parents find themselves in more dire economic situations, the college is forced is forced to discount their tuition further (offer more financial aid) and/or transfer to less expensive public schools, this translates into less tuition value,” said Dr. Scheiding.
It all isn’t bad news for Elizabethtown shop owners though. Gringo’s, a new Mexican Grill on Market Street opened in the beginning of September seems to be doing fine. Memoirs, who sells gifts and flowers have moved and doubled their space. “Mars just made a huge commitment and completed a 75 million dollar expansion to downtown Elizabethtown and Masonic Village added over 120 apartments to their property recently as well,” according to Beth Wood Bergman, executive director of Elizabethtown Chamber of Commerce/Main Street. “Many people that are shopping today are looking for a relationship so that I say hello to you, they are looking for that customer service,” Bergman says. “It takes a lot to have a healthy environment in the downtown, but a lot of us have our own unique character and it comes from the visuals, the relationship experiences you have with other people, and the events we have created downtown.” “We’re here and I think we have a lot of good memories that have been created in downtown.”To check your county’s economy click on the link below and follow instructions
Community Economic Toolbox
To hear quotes from Executive Director of The Elizabethtown Chamber of Commerce/Main Street Beth Wood Bergman click on each of the links
Investments in E-town
The Amtrak Station
Reported by Heather L. Edmonds