As we said in Part One of this series, a double-dip refers to a recession, followed by a short-lived recovery, followed by another recession. And there are plenty of signs that this second coming of an economic downturn has officially arrived in America, including the fact that our Gross Domestic Product has only expanded by 1.3%, while consumer spending is up a mere .1% in the second quarter of 2011. Add to that the fact that the national debt, and Congress’s current stalemate to raise it, is only exacerbating the U.S.’s economic problems.
So, let’s assume the U.S. has entered another recession—as shown in Part One, it’s probably not as bad as the first. But try telling that to the many Americans who do not believe that the 2007-2009 downturn ever even ended. A Gallup poll released in April found that 29% of those queried thought the economy was in a “depression” and 26% said that the original recession had persisted into 2011.
This lack of optimism for the present state of the economic “recovery” is likely due to the persistence of unemployment. With fourteen million people out of work (a third of those have been jobless for more than a year), and May employment data showing the jobless rate rose unexpectedly, reasonable unemployment figures seem like a faraway dream.
But there are 10 additional signs that another recession has taken up shop here at home—signs that are already impacting the way average Americans see the world around then, including the final five:
6. Slowing Chinese Economy
According to 24/7 Wall St., “A slowdown in the Chinese economy is usually seen as a cause of global commodity price inflation, but the effects cut two ways. China’s appetite for energy and raw materials may fall. But, the demand for goods and services by its very large and growing middle class drops as well.”
In addition to the aforementioned impact on the American psyche, People without jobs don’t spend, which will ultimately impact the growth of the country. Another effect is the need for tens of billions of dollars every year in government aid to keep the unemployed from losing everything. 24/7 says, “That support has increased deficits and the domino effect is that cash-strapped governments need to make more spending cuts. It may be the biggest challenge the economy faces.”
8. Dealing With the Debt Ceiling
Many folks feel like their pounding their heads against the debt ceiling, with a TV-full of pundits talking about the partisan politics behind the fate of the nation’s ability to borrow. Currently sitting at $14.294 trillion, regardless of what the media is selling, the sizeable debt ceiling probably be raised before the government has to cut back essential services on August 2. But the first by-product of debt reduction, or at least a slowdown in its growth, is a combination of higher taxes and a lower level of government services, neither of which is that appealing to a country full of hard-hit families facing a nation-full of bad budgetary news.
9. Access to Credit
According to 24/7, “The lack of access to credit has hurt the economic activity or both individuals and small businesses. In addition to loans being hard to come by for personal purchases of homes and cars, banks have been much less willing to loan money to companies with under 100 workers because these firms often rely on a few customers for revenue and usually have very little money on hand.”
10. Housing Market
The real estate reckoning is a continuing blight on the beleaguered economy—and has gotten worse in the past several months. Underwater homes, an inability to sell, and an inability to get credit to buy, is a recipe that means a real estate surplus will be harming the housing market for many moons to come.
This year’s double-dip could therefore mean we’re headed back to the dire economic straits of 2007 through 2009—when you were forced to look at other options when considering how to get by, whatever the cost. If you’re feeling the pinch, things are likely to be bad for a while. As a result, now may be the best time to reconsider your options to diminish debt and start saving for a “rainy decade.”
And one of the best options out there is a personal bankruptcy.
If you too have been affected by the first (or now, second) economic crisis, knowing a qualified bankruptcy attorney can help, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond “the dip.” The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation. Just call toll free to 1-888-234-4181, or make an appointment online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.