Of Course the Economy is Bad...It's An Election Year!

I spend a lot of time watching the presidential campaigns of the various candidates on both sides of the aisle. Call it force of habit. I worked as a reporter for more than 20 years, and I covered the 2004 primary and presidential races. I interviewed every candidate for president that year with the exception of President George W. Bush and Al Sharpton. In the cases of Howard Dean and Dennis Kucinich, I met and interviewed them several times. For some reason, they made multiple trips to Oklahoma during that campaign.

One thing that I noticed then, and that I am hearing again during this election year, is how important the economy is to voters. The candidates always talk about how hard it is for people to afford food, medicine and gasoline to get to work. They mention that single mothers have to work two, sometimes three jobs just to make ends meet. Current government programs aren't doing enough to help the truly needy Americans, the candidates say, but they have a PLAN to make everything better.

The only thing is, we hear this speech every four years. The people (that's us) just can't make ends meet on our own, so we need their (the candidate's) help. It's not a Republican or Democrat issue, either. Candidates from both parties talk a lot about how Americans are "struggling".

Well, of course the economy is "terrible"...it's an election year. If this country weren't in dire straits, we wouldn't need their (the candidate's) help. After the elections, the president always talks about how the economy is "improving" or "on the upswing" and they detail the many ways they made this happen.

The fact of the matter is, the economy runs in cycles. There are "boom" and "bust" periods to the economy, and they are quite natural. You know the saying "what goes up, must come down"? In a nutshell, that is how the national economy works. The good times never last forever, and there are naturally "corrections" (when the economy stalls, or enters a recession). How we as American consumers prepare for and deal with these negative periods as individuals will make far more difference in our households than anything that happens in Washington D.C. during the next four years.

Here are some of the ways presidential candidates propose stimulating the U.S. economy, and how you can apply it to your own personal situation:

The Spending Freeze - The candidate proposes a freeze on all government spending, meaning they promise not to increase spending above current levels. You can actually implement this at home right now. Vow not to add any additional debt to your credit cards, and start paying more than the minimum payments. Pay the basic necessities at home, but put off making any luxury purchases, such as large appliances, a home or a car.

The Tax Cut - The candidate promises tax cuts to let tax payers keep more of their money, which in turn gives consumers more spending power. This helps stimulate the economy. How do you give yourself a tax cut? If you have been receiving a tax return each of the past few years, you are having too much money deducted from your pay check. Anytime you receive a tax return, you are just getting back money you overpaid to the government. Essentially, you gave the government an interest-free loan for a year. Adjust your W-4 at work at keep that money yourself.

Shrinking the Size of Government - This means that the candidate wants to eliminate or reduce the size of certain government agencies. Never mind the fact that the government is the largest employer in the U.S....so it has room to eliminate a few jobs to make it appear the U.S. taxpayer is going to save some money. You can shrink expenses at home, too. Take a look at your monthly bills. Is there any fat to trim? Do you really need 10 movies channels on cable TV, or can you live with two? Are you still using a land line phone? Could you get buy just using a cell phone, or switching to the VOIP Internet phone service? Are you overspending on groceries? How often to you go shopping for clothing, movie rentals, and other items at the mall? Even if you can cut ten percent of your spending, that will add up over the course of a year.

Increase Revenue - This is the government's way of saying they are going to raise your taxes, or "user fees" for certain services. You can raise your fees, too. Are you overdue for a raise at work? Do you get increased pay for overtime, or for increased production at work? Volunteer for those opportunities, or seek that raise you should have received a year ago. If you can't get a raise, perhaps you aren't taking full advantage of the benefits you already receive at work. Some people aren't even aware of all of their employer-sponsored benefits. Check out your employee handbook and see what you might be missing. Do some work on the side. Can you freelance, consult or take a part-time job? Perhaps you've always wanted to start a side business. Increasing your take-home pay, even a few hundred dollars a month, could be used to eliminate debt, build your emergency fund or invest for retirement.

Manage your personal finances wisely, and you can enjoy "four more years" of positive cash flow!

(This post is also featured on MSN.com's Smart Spending Moneyblog.)