1. Get out of debt. Those who have debt should seek to get it knocked out — and not just because of the current economic times, but no matter what the times are like. A mortgage would be an exception, but we should still seek to get those paid off as quickly as makes sense as well.

2. Save. Again, this is important in all economic environments. Hopefully the current environment can serve as a reminder of the importance of this.

3. Learn how to create a budget and stick to it. Paying off debt and saving don’t happen automatically. People should have a system to know where their money is going and how much they can allocate to different spending categories while still meeting their goals. Again, this is also important in good times as well as bad.

4. Give. Still give, in spite of the tough times. There are nuances here for those who are in deep debt and seeking to get out, I believe. But we shouldn’t stop being generous because of difficulty. And there are many ways to be giving — money is not the exclusive way.

5. Protect cash flow. Even with a lot of assets, one can go bankrupt without the necessary cash flow for meeting ongoing obligations. Here’s an example of how to apply this: If your car goes out and you have to get a different one, don’t empty out your savings to avoid debt on it. This is an instance where debt could be used wisely to preserve cash flow.

In other words, if you have $10k in savings, absolutely need a different car, and you can get one for $8k, don’t pay for it outright and only leave yourself $2k in savings. Instead, make a $2k down payment and take out a loan for the other $6k so that you can keep a sufficient level of cash in your savings. This is even more important in these economic times.

6. If you have 10 years or more before retirement, increase what you are putting into your retirement accounts if you can. The market will turn again. Investing as much as possible, after the above priorities are fulfilled, while the market is at the current level will likely result in very good returns over the long-haul — 10, 20, 30 years. Great opportunity here. And if the market doesn’t turn in that time frame, well I think that would mean the economy is so terribly bad that the lack of return on that extra investing would be the least of one’s problems.

7. I wouldn’t buy gold. Or a bomb shelter.

The interesting thing is that most of these principles are things we should be doing regardless of the economic times. The one major difference right now is the importance of being even more diligent to protect cash flow.

Given the expected results of the current administration’s economic policy, what is the wisest course of action for individuals?

In other words, how should the average American handle his or her family’s finances in such a way as to avoid the pitfalls (and tap into the opportunities) we should expect in the future? Focus on getting out of debt? Invest now while the market’s low? Buy gold? Build a bomb shelter?

I realize books could be (and probably have been) written about this, but I’d be curious to hear what principles you’d apply in this situation.

2.The deregulation led to excessive industry advantages over both their workers and their investors. This is part of the meltdown issue no one is talking about.

3. Once again the lack of government spending on the federal level led to more spending/taxes on the lower level, it also led to Americans using credit and get rich quick schemes to make current and future ends meet. The defense spending was so great between Reagan and Bush 1 that Bill Clinton had to run on a cutting the deficit ticket.

4. It was a tight money policty, but not an anti inflation policy. The truth is the dollar had lost most of its value by the time Reagan was done, and now its worth even less.

IE in the 60′s-70′s you could buy a very nice and new 3-4 bedroom house for $25-40G in nearly every suberb in America, that same house, with no inmprovements to it, and barely none to the community, would cost you between 400,000-1,000,000 depending on the locale, today.

Granted Obama will make things worse, but your worship of reagan is disgusting. People suffered horribly under Reagan.

Trickle down economics doesnt work, trickle up economics doesnt work.
A healthy society(in terms of Economics)needs

1.the average citizen to have access to the knowledge and capital needed to spark lots of entrepeneuriship.

2.Fair taxes and regulations that dont hinder business, or put the worker back in the 19th century.

3.Low real inflation, and a good standard of living for the average citizen.

Without any of these you will have a stratified system which will lead to the people asking for (possibly demanding) socialism.

The best time in American history was the 50′s-60′s (with all of its problems). Since then, the American worker/investor has been shafted by the governemnt and the business communtiy. They are working together to make us serfs. Being African American, I know what its like to be the builder of a house I can’t live in, so I am able to see the big picture clearly, and before you do.