In the Financial Times (April 28, 2008) was written: Investors pull out of mutual funds. ... Assets fall in worst start to year for decade. ... All but one of the largest U.S. mutual funds managers saw their long-term assets fall in the first quarter. Are these recessionary challenges?

Whatever you wish to believe is awry with the U.S. economy, recessionary economic challenges have caused disruptions with market shifts, the reallocation of assets to money market funds, higher prices for food and petroleum, volatile shifts in business momentum, etc.

An economic recession is a decline in real Gross Domestic Product for two or more successive quarters during a year. It is a period of higher unemployment, declining personal income and lower industrial production. Recessionary talk has most people atwitter.

Associated Press writer Eileen Connelly wrote: Even millionaires are feeling the economic squeeze, with many saying they dont even feel wealthy. As a group, however, they are optimistic that economic conditions will improve by next year. This might be the case.

The U.S. government is providing taxpayers who filed 2007 tax returns with stimulus checks. These checks are in varying amounts based on adjusted incomes and family situations. They are designed to stimulate the economy through the purchases of goods and services. This act by the Bush administration is a fitting example of a recessionary economic challenge.

But Warren Buffet, the financial guru, said the United States is already in an economic recession. His word is good enough for investors galore to take his advice and make moves to counter recessionary economic challenges. They are adopting behaviors to deal with the challenges.

Business sectors in the U.S. are facing unanticipated economic downturns. Therefore, policy makers must better protect people and businesses from undue economic risks without creating unanticipated side effects. The overall goal, however, must be to balance our sense of actual economic viability accompanied by an awareness of how market conditions ebb and flow.

In the meantime, here are seven ideas to be considered about mixed economic challenges:

1. Curbed spending. Nonessential spending must be kept in check for an indefinite time.

2. Job protection. Maintain your employment. Seek income from part-time jobs.

3. Debt pared. In addition to curbed spending, pay off all nonessential debt.

4. Focused retirement. Retirement funds are exclusively for retirement purposes.

5. Forced savings. Pay yourself each pay period as if a fixed expense.

6. Family initiatives. Family initiatives must deal with economic challenges, be they recessionary or otherwise. Family-related economic discussions could be revealing.

7. A coping attitude. Counter recessionary economic challenges with a mantra, This economic challenge will soon pass.

Economic recessions do not affect all individuals and businesses proportionally. In fact, an economic recession is among the best of times for some people to acquire wealth. Inversely, economically poor people are likely to suffer during recessionary times ... with little wiggle room. Recessionary economic challenges are for individuals and businesses to confront individually.

Reach T&D Columnist Howard D. Hill, Ph.D., via educationconsultant@sc.rr.com

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