The recession is not about the money that we are spending — or not spending — now. The recession was caused by our spending habits in the past, where we as a culture spent money that we didn’t have. The press is filled with stories of greedy companies who offered sloppy credit to people who couldn’t afford it for the sole purpose of fattening corporate coffers. The subprime mortgage market ultimately failed, and things generally collapsed from there. They can all be traced back however to general incompetence on both the corporate side and the consumer side. Perhaps we have learned a lesson — managing money effectively is a skill that many people simply don’t have. Hopefully, you are not one of them.

In the end, he got what was coming to him. Wall Street swindler Bernie Madoff was recently sentenced to a prison term of 150 years for masterminding the world’s largest Ponzi scheme. It is estimated that Madoff stole approximately $65 billion from his clients that included friends, charities, celebrities, and ordinary people who trusted him. Since the early 90s, Madoff and his wife lived the life of luxury and virtually endless abundance. At age 71 however Madoff will spend the rest of his life in jail. It just goes to show that wise investing should probably be done by you.

May’s unemployment rate was 9.4%, the highest it has been in 26 years. The federal stimulus funds intended to help create jobs have in fact only slowed the job losses. Despite the fact that there appear to be glimmers of hope that the recession will soon end, the experts all seem to agree that it will take quite a while for the job market rebound as well, and that double-digit unemployment is highly likely. Anyone who is threatened by unemployment should consider launching a home-based business in a recession proof industry.

The Great Depression of the early 1930s was caused to a large degree by unsound mortgages and nationwide foreclosures. Does this sound familiar? Back then, the government created the Federal Housing Administration to insure mortgages and to help people stay in their homes. The current economic meltdown has largely occurred due to the growth of risky mortgage practices over the past decade. In other words, the same thing that caused the Great Depression has caused the present recession. And Fannie Mae and Freddie Mac are in deep trouble. I’ll ask it again — will we ever learn?

The first Social Security check was issued to a woman named Ida May Fuller in 1940. The amount of the check was a whopping $22.54. Apparently back then Social Security had no problem funding the payment. Unfortunately, that is no longer the case as the entire system teeters on the verge of insolvency. If you are basing your long-term financial planning and retirement future on Social Security it might be time to rethink your options. Even if the system doesn’t break down, it probably won’t be enough to live on comfortably.