I think the "Economic Downturn", those two words that have been shoved down our throats, has forced many to rethink their summer fun. For us, it's always been about the simple pleasures, so we haven't had to make too many changes.
If anything good is to come out of this Recession, then perhaps it will be that more people will be pursuing simpler pleasures. My brother is director at a metro nature center and he's reported that park usage is way up from last year. That's evidence enough to me that people are starting to get back to happier times and they're doing so without spending a lot of money.
Your children do not need fancy toys, video games, or expensive past times. They need love, joy, creativity, and attention. With those simple things, they will thrive. Add sunshine and warm weather and watch them grown into creative adults. (Water with a lawn sprinkler or popsicles!)
Five hundred water balloons come in a small canister for a few dollars. So far, this summer, they've provided endless fun. Friends come over and they're instantly drawn to the hose, the balloons, and creating targets. There's nothing like the sound of eleven year old boys as they whoop and scream and fire away at each other and various targets.
Happy Days are Here Again. You just have to look for them.