Gauging the health of the American economy

You may rely on media reports. Or you may rely on what you see around you or what you are told by friends, family & associates. For me I turn to a colleague who works at a bankruptcy court in Maryland.

And her report was not reassuring.

Chapter 13 filings have increased (individuals seeking to keep their homes; avoid foreclosures). And on the business side, things are just as bad. At first there was a wave of businesses filing for bankruptcy protection. Think about all the shops at a mall. Overtime, as the businesses lost customers (who were laid off), the businesses had difficulty making payroll and paying expenses such as rent. Now, according to my friend, there’s another wave of bankruptcy filings: the property owners of those office complexes & shopping malls.

This is crude but think about what happened to the nation of Japan in March of 2011: first the earthquake, then the massive tsunami, then the problems with the nuclear reactors – this third occurrence is still ongoing.

There are still ongoing issues with the American economy. Regardless of who is in the White House as of January 20, 2013, the fundamental economic issues shall remain. The next wave: the federal government. Because of our broken two party system – where the extremes reign, moderates have evaporated and compromise is an alien concept, there shall be layoffs of federal workers, reduction in government services and reduction in government benefits. Things will be worst before there is an glimmer of a true recovery.

Don’t be fooled! Continue to save and live below your means.


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