Benefits of an Economic Recession

Benefits of an Economic Recession



A lot of people think that an economic recession is bad. While that is partly
true, there are certain benefits.



When the economy is in recession, it won’t be long that you will get a check
from the Internal Revenue Service or IRS. This may amount from $300 to $1,200
which is the government’s way to help the economy.



If you are wondering how much you will get, compute for this using the economic
stimulus tax calculator. This is considered to be a rebate so if you didn’t get
it this year, you will in 2009. This was done when the economy was in recession
in 2000 but most of the checks came in when the economy was recovering a year
later.



During an economic
recession, majority of bonds and stocks are undervalued. This means it is
bargain to buy them right now so go for it! Before you go on a shopping spree,
find out which company’s shares will do better once the economy recovers. With
that in mind, it will be easy to decide which one you should invest in. It is
also possible to buy new homes when the prices have gone to an all time low.



One solution to curb the economic recession is for the Federal Reserve to lower
interest rates. This means that as long as you have good credit ratings, you
will be able to borrow money from the bank.



As a consumer, an economic recession brings tax breaks. What happens is that you
don’t have to pay the IRS that much this year because of a deduction for private
mortgage insurance which happens to be an extension of the sales tax write off
and also a boost in the alternative minimum tax exemption amount.



If you are still working, an economic recession may also increase retirement
account limits. You can do this by using your rebate check to turbocharge your
retirement savings and investing this in a Roth or Traditional IRA. Some people
have decided to invest it in both.



Should your gross income is $100,000 and below, you can now roll over your
401(k) directly into a Roth IRA without having your funds go through a Rollover
Traditional IRA first. But if your income is above $100,000, just wait until
2010 when the income limit disappears so that you too can invest this into your
retirement account.



There are people who say that an economic recession is also good for the
environment because the consumer will be forced to cut costs. People will more
likely trade in their sports utility vehicles or SUV’s for more fuel efficient
vehicles. This in turn will reduce the number of carbon gases that are released
into the air. Unfortunately, industries won’t be able to do the same.



Instead of going to the store to buy something you like, more people will order
and purchase the same items online thus increasing business over the web. The
same goes for advertising because it is much cheaper to do this online that
billboards or newspapers.



There are benefits to an economic recession even if many of us see that nothing
good comes out of it. The only consolation is that it is only temporary and the
economy will recover by late this year or early next.