US Economy Still in Peril
Michelle Malsbury, BSBM, MM
July 17, 2009
Despite the gloom and doom on Wall Street just prior to the presidential elections last fall and the bailouts soon afterward we are far from seeing the bottom. The stock market remains a bumpy ride at best. Foreclosures and unabated unemployment continue to dominate our economic landscape across America with ripple effects globally.
While there is some talk about a second stimulus I would caution our legislators to get the first stimulus out and working before incurring any more debt. Unless we can begin to create significantly more jobs we are going to continue to see foreclosures rise and less consumer spending. States that are already broke will continue to be taxed with paying more and more unemployment benefits. We´ve seen nothing comparable in our lifetimes.
Dawn Wotapka (2009) in an article for the Wall Street Journal said that there were 336,000 foreclosure filings in June of 2009, which she also notes was the fourth month we had foreclosures in excess of 300,000 nationwide, or one in eighty-four. Nevada still tops the list with one in sixteen homes in foreclosure, a 61% increase over a year ago [2008 tallies]. Arizona holds second place with one in every thirty families in foreclosure. Florida is third with one in thirty-three homes foreclosed.
The web site www.Realtytrac.com began compiling information about sliding homes prices and foreclosures back in 2005. At that time they saw a 20% decline in prices and an uptick in foreclosures. If the Bush Administration had acted back them perhaps we would not be in such pitiful shape now.
When President Obama took office his Administration declared a moratorium on foreclosures, but that moratorium as just delayed the inevitable. As unemployment continues to rise more and more people are unable to pay their mortgages. Soon those homes will be in foreclosure, if they are not already there. Many more people owe significantly more than their homes are currently worth [Moody´s estimates this is as high as 15 million]. (Wotapka, 2009)
Nationwide we have seen home prices and appraisals drop as much as 60%. Barclays estimated that in 2009 there would be three million or more foreclosures. (Wotapka, 2009) 2010 does not look much brighter. Again Barclay´s estimates we may see another 2.6 million foreclosures across America in 2010 due to the unemployment rate continuing to rise. Some foreclosures are selling. Realtytrac estimates that approximately one third of the sales in 2009 will be from foreclosures. However, that does not appear to be having a stabilizing affect on home prices. What can be done to pull us up from this downward spiral?
The number one thing we can do is to create jobs and put people back to work! When people are working they are spending money and boosting our economy. President Obama spoke about how "going green" would create jobs across America and the world. "Going Green" does not just mean using biodegradable or environmentally friendly items, but also making strides with biofuels and solar/wind technology. Boone Pickin´s was one of the first to embrace sustainable energy and he is an oil man. American auto manufacturers need to concentrate on creating cars that can run on those sustainable fuels or other forms of energy with increased MPG´s. Part of that is covered in the proposed cap-and-trade legislation now being debated in congress.
Other things we can do are to help communities to set up fruit and vegetable garden projects to feed their people with healthy, affordable, organic foods. These types of projects also foster a community based appreciation for sustainable agricultural and goodwill toward ones neighbors. More needs to be done with recycling. Recycling is more than separating and collecting. We need to create businesses and technology to make things from these recycled products that can be used in our everyday lives. Those items can range from glassware to garden hoses to roofing products and more. Growing our businesses and being innovative is the key. Businesses create jobs and jobs boost the local economy. Small plans and changes begin at the community level and work up to the state and national levels over time.
Another plan I´ve had is to bring back Amtrak. [I am using Amtrak as a generic term in this sense] Most countries have rail systems that help transport good, services, and people across large or small distances in a more economical and faster way than can be done on their roadways. America has fallen way behind in this endeavor. Funding need to be used to place down more track, build more trains with more capacity and speed, to connect more places across American with one another such that goods, services, and people can affordably, effectively, and efficiently be transported. Doing so would relieve the number of cars traveling at peak hours on our roadways and lessen the effects of green-house gasses being released from those automobiles into our atmosphere.
Those are just a few suggestions. Unless or until someone makes the first move our economy will continue to dwindle and our people will continue to suffer from higher unemployment and foreclosure. If you, or someone you know, is in a position to create a new business or technology please do so now. Help the people of America get back to work!
References:
www.realtytrac.com
Wotapka, Dawn. 2009. U.S. Foreclosures Continue to Shatter Records. Wall Street Journal: Business Section. Thursday, July 16, 2009.
While there is some talk about a second stimulus I would caution our legislators to get the first stimulus out and working before incurring any more debt. Unless we can begin to create significantly more jobs we are going to continue to see foreclosures rise and less consumer spending. States that are already broke will continue to be taxed with paying more and more unemployment benefits. We´ve seen nothing comparable in our lifetimes.
Dawn Wotapka (2009) in an article for the Wall Street Journal said that there were 336,000 foreclosure filings in June of 2009, which she also notes was the fourth month we had foreclosures in excess of 300,000 nationwide, or one in eighty-four. Nevada still tops the list with one in sixteen homes in foreclosure, a 61% increase over a year ago [2008 tallies]. Arizona holds second place with one in every thirty families in foreclosure. Florida is third with one in thirty-three homes foreclosed.
The web site www.Realtytrac.com began compiling information about sliding homes prices and foreclosures back in 2005. At that time they saw a 20% decline in prices and an uptick in foreclosures. If the Bush Administration had acted back them perhaps we would not be in such pitiful shape now.
When President Obama took office his Administration declared a moratorium on foreclosures, but that moratorium as just delayed the inevitable. As unemployment continues to rise more and more people are unable to pay their mortgages. Soon those homes will be in foreclosure, if they are not already there. Many more people owe significantly more than their homes are currently worth [Moody´s estimates this is as high as 15 million]. (Wotapka, 2009)
Nationwide we have seen home prices and appraisals drop as much as 60%. Barclays estimated that in 2009 there would be three million or more foreclosures. (Wotapka, 2009) 2010 does not look much brighter. Again Barclay´s estimates we may see another 2.6 million foreclosures across America in 2010 due to the unemployment rate continuing to rise. Some foreclosures are selling. Realtytrac estimates that approximately one third of the sales in 2009 will be from foreclosures. However, that does not appear to be having a stabilizing affect on home prices. What can be done to pull us up from this downward spiral?
The number one thing we can do is to create jobs and put people back to work! When people are working they are spending money and boosting our economy. President Obama spoke about how "going green" would create jobs across America and the world. "Going Green" does not just mean using biodegradable or environmentally friendly items, but also making strides with biofuels and solar/wind technology. Boone Pickin´s was one of the first to embrace sustainable energy and he is an oil man. American auto manufacturers need to concentrate on creating cars that can run on those sustainable fuels or other forms of energy with increased MPG´s. Part of that is covered in the proposed cap-and-trade legislation now being debated in congress.
Other things we can do are to help communities to set up fruit and vegetable garden projects to feed their people with healthy, affordable, organic foods. These types of projects also foster a community based appreciation for sustainable agricultural and goodwill toward ones neighbors. More needs to be done with recycling. Recycling is more than separating and collecting. We need to create businesses and technology to make things from these recycled products that can be used in our everyday lives. Those items can range from glassware to garden hoses to roofing products and more. Growing our businesses and being innovative is the key. Businesses create jobs and jobs boost the local economy. Small plans and changes begin at the community level and work up to the state and national levels over time.
Another plan I´ve had is to bring back Amtrak. [I am using Amtrak as a generic term in this sense] Most countries have rail systems that help transport good, services, and people across large or small distances in a more economical and faster way than can be done on their roadways. America has fallen way behind in this endeavor. Funding need to be used to place down more track, build more trains with more capacity and speed, to connect more places across American with one another such that goods, services, and people can affordably, effectively, and efficiently be transported. Doing so would relieve the number of cars traveling at peak hours on our roadways and lessen the effects of green-house gasses being released from those automobiles into our atmosphere.
Those are just a few suggestions. Unless or until someone makes the first move our economy will continue to dwindle and our people will continue to suffer from higher unemployment and foreclosure. If you, or someone you know, is in a position to create a new business or technology please do so now. Help the people of America get back to work!
References:
www.realtytrac.com
Wotapka, Dawn. 2009. U.S. Foreclosures Continue to Shatter Records. Wall Street Journal: Business Section. Thursday, July 16, 2009.
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