Mark Twain once said that “There are three kinds of lies: lies, damned lies, and statistics.” Apparently the Congressional Budget Office didn’t get the memo.
The Congressional Budget Office recently updated their 10-year deficit projections. They estimate that “federal debt held by the public is projected to grow steadily, from 79 percent of GDP in 2019 to 95 percent in 2029—its highest level since just after World War II.” This is bad news because:
After 2019, consumer spending and purchases of goods and services by federal, state, and local governments are projected to grow at a slower pace, and annual output growth is projected to slow—averaging 1.8 percent over the 2020–2023 period.
If the CBO is right, then the negative correlation between debt and GDP could be a big part of what ushers in a period of recession beginning next year.
But maybe I shouldn’t go all Debbie Downer just yet since some scholars actually contend that New Hampshire is somewhat insulated from an economic downturn.
Erick Elder, a professor of economics at the University of Arkansas, for example, argued just a few years ago that New Hampshire is actually “amply prepared for the revenue shortfalls that would occur during a recession of average severity.” And as the New Hampshire Fiscal Policy Institute recently pointed out, “portions of New Hampshire’s workforce are coping with stagnant or shrinking wages and job opportunities in lower paying industries.”
So maybe Mark Twain is right, and it’s really all about how you interpret the numbers. What is smart to do either way is begin to plan for the worst case scenario. If Mark Twain wasn’t enough of an authority for you, then there’s always Benjamin Franklin who said that “an ounce of prevention is worth a pound of cure.” There is no way to know for sure that a recession is on the horizon, but there are multiple ways to construct a firewall that protects against it. Enter the world of freelancing.
Freelancing allows people with full time jobs (or none at all) to earn extra money in their free time. Long gone are the days that the gig economy was relegated to selling one’s hair or blood. The options today are substantial and worthy of consideration:
- AirBnB – Have an extra room in your house? Consider renting it out to people searching for a cheap alternative to hotels. This is a basically passive (and often lucrative) income stream you should take advantage of.
- Uber or Lyft – If you have a registered and inspected car made in the last decade, then driving people around might be for you. If you register as a driver in MA, then you are able to drive both in NH and in Boston where overnight shifts on the weekend can easily net you at least $100.
- Ebay – One man’s trash is another man’s treasure. Yard sales and flea markets are full of items whose value might be triple on Ebay than what you paid.
- Focus Groups – How does earning $50 for an hour’s worth of work sound? New Hampshire and neighboring Boston has several companies that hold focus groups and conduct product research on a regular basis. The online sign up forms ask a ton of questions meant to match you with studies for which you qualify. If you don’t mind filling out forms longer than an eHarmony questionnaire, then focus group invitations might be soon waiting at your fingertips.
- Leverage a Talent – Years ago I learned how to design websites, and these days I do this on the side at Bricks Plus Clicks, which designs websites and does marketing for small businesses. Sometimes my clients are a local church or small business. Other times I get calls from people across the country who want help marketing their startup. Whatever your passion might be, there is probably a market for it. Even Meghan Markle made money as a calligrapher!