The fear of seeing someone double-dip in your homemade guacamole pales in comparison to the unbridled terror that the term double-dip evokes when referring to the economy. For the last year and a half, it seems like every time the economy appears to make some headway, there is a rash of detrimental economic numbers that put the recovery in jeopardy and sparks discussion of a dreaded double-dip. This week Moody’s announced that the outlook for the retail sector was now “positive,” a marked improvement from its previous position of “stable.” Consumer confidence is rising, the economy is beginning to create jobs, GDP is ballooning, the dollar is strengthening and it turns out that the government is actually in line to make a profit from the controversial TARP. So why is there still so much pessimism?

Part of the problem is that much of what people perceive is based on hearsay and speculation, not facts. Most people probably think that the economy has been in a freefall, but for the past several months, there have been signals of improvement from several sectors. With money cheap and many companies and individuals in a position to invest, the pieces seem to be aligned for a full-fledged recovery. However, there is one barrier that stands squarely in the path back to prosperity: Fear. Uncertainty about commercial real estate, the housing market and other global economies (i.e. Greece, Dubai, etc.) is continuing to deter ably funded people from investing. And it’s not only investing; people are cutting back across the board on discretionary spending. It would seem that with interest rates held at virtually zero that people would be spending like crazy, but that simply isn’t the case.

Our reliance on credit over the past decades certainly has put us into a hole, and reverting to more saving and cash spending is probably a good thing. Saving is a cornerstone of a prosperous economy, but investing is too. For those in dire financial circumstances, saving should obviously be a top priority. But despite the seemingly ubiquitous nature of financial hardship, there are people who have money and are simply not spending. According to a recent article from CNBC, there is more than $9 trillion in cash, money markets and savings accounts that people are simply sitting on. Apparently, there is some shellshock after so many Americans lost their savings in the wake of the last recession. In order for our economy to get back to where people like it, money has to be spent, plain and simple.

The important thing to remember is what got us into the recession in the first place; it wasn’t prudent investments that went south or people investing in emerging markets that failed to produce. What ruined the economy were reckless lending; insufficient reserves at big banks; severe overvaluation of the housing market; arcane financial derivatives; and other obscure and possibly immoral practices. Of course, you should always be careful when making an investment, but just because you’ve been burned recently doesn’t mean that you have to retire from investing.

Certain sectors are still overvalued—such as real estate—but others have been artificially devalued due to rampant fear. One of the first rules of investing is to buy low, and this is the time to do it. In addition to low prices, there are also burgeoning opportunities for investment in new technologies such as alternative energy.

Of course, we are all directly impacted by the overall health of the economy, but from a spectator’s point of view, what happens in the coming months and years is sure to be a fascinating spectacle. Fiscal conservatives are worried that Obamacare and other tax-laden legislation will suck money from the country’s top investors and hamper our ability to invest in the future and foster economic recovery. Those of the Keynesian persuasion envision an economic landscape with more prosperity for everyone, where the wealth isn’t consolidated in a minute section of the populace. It will take years for the full ramifications of current legislation to become apparent, but up until then, we will get to witness the rhetoric-filled battles from both sides and what seems to be an increasing polarization of the nation’s fiscal ideals.

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