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Why the economy will take much longer to come back.

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posted on Apr, 29 2009 @ 11:05 AM
This is a typical example of why the economy is going to take much longer to come back. Since Dec. 2007 things have been going downhill, in Sept 2008 it got worse.

Here is a typical example. Person X is 35 had $10,000 in savings for retirement and some debt but it was manageable. Suddenly for 2 years this person finds he/she is underemployed and unemployed for a period of 2 years.
In this period all savings are wiped out and the debt load has increased to an unmanageable level. It is either live on there line of credit or become homeless.

Finally after 3 years of this the person finally finds a decent full time job. But look what it cost them in wealth reversal.

1)All their savings are gone.
2)They are debt to a maximum level.
3)Lost their house/condo

How long will it take to get back to where they were before, that means paying off all that debt, and trying to save up again, getting another house. The point is it might take a decade just to get back to where they were in 2006. During this time they feel forced to minimize all non-essential purchases such as cars, vacations, new electronics, new houses, newer clothing.
This is why I think this economy is going to be down for a while. The stimulus package is just a short term band-aid for big business and wall street, it's true it does allow those companies to keep more people employed, which is good.
But it sure doesn't help people that have lost everything, and are now in a monetary black hole. How many people are forced to declare bankruptcy destroying there credit for the good part of the next decade. Hurting their ability to recover.

I was reading an article that talks about under-employment, it talks about so many people right now have a part time job buy they want full time. Or they maybe have multiple low paying part time jobs that don't even equal a full work week.

Tough times.


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