What IS Going on with the Economy?

One of the issues that many people are worried about in terms of their present and -- especially -- their future personal finances is the economy. But what IS going on with the economy? Alan Greenspan says that we are in a "really pale" recession. Whatever that means. And Treasury Secretary Paulson says that we are nearing the end of the economic troubles. He insists that no "second stimulus package" will be necessary.

So, it sounds like things are going in a fairly positive direction, right? Well, maybe not. Inman News reports that there might be a deep recession:

"There is a great risk here. The risk here is that we could have a deep recession," said Rosen, speaking Tuesday during an annual Fisher Center Real Estate Conference in San Francisco.

In his view, there is a 45 percent chance for a deep recession, which could mean the loss of 4 million jobs and a rise in the unemployment rate to 7 percent.

Rosen gives a 50 percent chance to this recession remaining mild, and a 5 percent chance to a quick recovery.

So, who's right? That's just it. We don't know. One good thing about all this uncertainty is that it is forcing many to take a second look at how they manage their personal finances. And this is a good thing. A very good thing.

Ultimately, whether we are in a "pale" recession, a deep recession, or no recession happens at all, you should think about your personal finances. Reduce your debt, build up your savings and consider solid investments. That way, no matter what happens with the economy, you will be affected to a lesser degree.