He also says that the United States has faced bigger economic challenges than the one we’re currently facing, including 2 World Wars and the Great Depression of the 1930’s.  “Though the path has not been smooth, our economic system has worked extraordinarily well over time.” It has unleashed human potential as no other system has, and it will continue to do so. America’s best days lie ahead.”

Buffet’s letter is a “good news/bad news” statement.  Yes, the economy stinks right now but that doesn’t mean it’s time for all of us to give up.

We’re stronger people than that.

It’s time for us to “buck up,” deal with the mess we have, and to stop panicking.

If I had one wish for the United States right now it would be for the media to stop publishing so many “gloom and doom” stories.  It’s freaking people out and the last thing people should be doing is making financial decisions when they’re scared and panicked.

Not everybody is losing their job (more than 90% of people are employed).

Not every company is losing money (Walmart had a 4 percent rise in profits in the 4th quarter of 2008).

Not every company is cutting hours or laying off people (CNN Money recently published a list of 20 companies that are hiring at least 350 people each).

I’m not pretending to be Pollyanna and saying everything is “peachy keen.”

It will take time for the economy to bounce back.   There were some bad mistakes made by the financial industry over the last several years, the most glaring one was giving mortgages to people with very shaky credit and giving loans for up to 125 percent of the value of homes.  That was just a disaster waiting to happen…..and now it has.  Like it or not, we’re all going to end up paying for that mistake.

The best thing you can do for yourself in this current economic climate is to take care of your personal finances the best you can so that you can weather the storm we’re currently riding out.  That means, starting today, living within your means and paying off your debt.

That’s what I’m doing.

It makes sense doesn’t it?  Less debt means less bills to pay which means a personal financial downturn that might show up in the form of reduced wages at work, reduced hours at work, the loss of a job, and investment losses, will be easier to weather.