By Tim Woods

Tribune-Herald staff writer

Government intervention aside, local economics expert Kent Gilbreath says Americans need to rethink how much they spend, learn how to save and cut back on credit card debt.

Gilbreath, a Baylor University economics professor who has served on the board of directors of the Federal Reserve Bank of Dallas, gave a seminar Friday to a packed room of Baylor students and faculty, shortly after the federal government announced plans to purchase more than a half-trillion dollars in bad debt now held by fragile financial institutions.

During his talk, Gilbreath, a self-proclaimed optimist, acknowledged that “what we are experiencing today is happening on a scale that we have not seen in 70 or 80 years.”

“Now, I’m really concerned and I’m not, by nature, a pessimist,” said Gilbreath, who last year wrote a paper titled The Coming Perfect Economic Storm.

The government’s move, considered the most sweeping federal action to save faltering financial institutions since the Great Depression, sparked a second straight successful day on Wall Street.

Gilbreath, though, called the two-day surge a “blip.”

Even so, he was loath to compare the United States’ latter-day economic struggles to the Great Depression.

“I in no way foresee us moving into a depression that in any way resembles the Great Depression,” Gilbreath said after his talk. “But I do believe we are in for very slow growth, higher unemployment and a period of stress and uncertainty in the financial lives of ordinary Americans.”

Central Texas, and the state as a whole, has a healthier economy than many other parts of the country, though no part of America, including Texas, is insulated from the nation’s economic woes, Gilbreath said.

The day-to-day problems are fixable, he said, as long as people are willing to make the necessary lifestyle adjustments.

“Here’s the bottom line: All Americans need to step back and reassess their economic lives and their spending patterns,” Gilbreath said. “Americans need to relearn how to save and how to avoid debt. Americans need to self-impose limits on their credit card usage. We must relearn some of the economic survival skills that our parents and grandparents had from having been through a Great Depression and a great war.”

Gilbreath added: “I have utmost confidence that we can make the personal adjustments necessary to eventually bring us out of this difficult economic time.”

twoods@wacotrib.com

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