Current and Future Economy Compared to the Great Depression
For quite some time now economists and the Fed have been trying to avoid saying what they knew to be true. America is in a recession and Americans are suffering.
The price of food and gas continue to rise while the value of the dollar shrinks. If that wouldn't be hard enough to deal with on its own, many people are losing their jobs in mass layoffs across the country as companies scale back and restructure in order to cope with a failing economy. With a shortage of jobs, the number of people filing for unemployment benefits is now higher than it has been for two years. And according to a recent Salon.com article, a record number of Americans are now receiving food stamps.
Home prices have plummeted and Americans are swimming in consumer debt.
Many Americans without health insurance are just one medical crisis away from filing bankruptcy. Many people, without a doubt, are financially hanging by a single thin thread.
Financial experts now admit that there most likely is a recession and are now speculating just how bad the economy may get before we see better days. It is quite unnerving to hear them mention the Great Depression in comparison to how terrible the housing market is and what financial devastation the future may hold.
There have been recent reports of home sales in some markets starting to pick up, and this has given a glimmer of hope to many people who are now attempting to sell their homes and salvage some of their investment rather than have the bank foreclose on their properties.
However, even if the housing market shapes up over time, a recent Consumer Affairs report indicates that it may not be of much help to many Americans who are simply too far in debt.
Some economists believe that overwhelming credit card debt that has been racked up by overspending during easier financial times has finally caught up with people and that has caused the nation's economy to hit a brick wall.
Over the last 20 years credit became easier to come by and rising home prices allowed people to refinance and continue spending rather than to stop spending at the end of their paychecks. Now credit is more difficult to get and Americans are maxed out. With all emergency credit resources used up or unattainable, financial crisis, foreclosures and bankruptcy are now commonplace.
The recently approved economic stimulus package will put some extra cash into the hands of people who desperately need the money. However, the problem for the economy may be that people could use the money to pay overdue bills or pay down some of their credit card debt and not go out and spend the money and stimulate the economy.
That means that when the money is gone, the economy will be the same and Americans will just have to get back on the treadmill and try to keep up with their financial obligations and avoid bank foreclosure and bankruptcy.
