It’s no secret that Americans are losing their jobs in droves. The country can’t create new ones and nearly one-in-ten are unemployed. As incomes are eradicated and careers crumbled, the new terrible trend in the US is hitting home hard. Literally.
Homes across America thought safe from foreclosure are going back to the banks as more and more people are finding out that they’re not as safe and sound as they once thought. As bills add up and Americans become unable to make payments, banks are becoming quick to step in and swipe houses from those that are even one payment late.
Such was the case recently with Linda Hatchel and her 1895 Victorian home outside of Chicago. She purchased the house when it was up for demolition for a single dollar over 20 years ago, but spent $50,000 alone on moving it a distance of only 1.5 miles. She gutted the home and restored it herself, eventually taking out a second mortgage to pay for her renovations. She’s been able to make her payments ever since, but a bout with cancer has left her with medical bills coming before housing payments. Now after failing to make her final payment, the banks are bugging her to pay up.
“I had one year left on my mortgage, and it would have been paid off,” she tells an NBC affiliate from Chicago. “I wanted to live here for as long as possible,” she says, so Hatchel managed to empty out the countless antiques from the home to make that final payment. More than 20 years after buying the house for the price of a few games of Pac Man, Hatchel found herself jobless thanks to a banking job gone bad and a diagnosis with cancer. Now as she scrounges for change in an attempt to make her payments, the one-dollar house of a lifetime might be going back to the demolition block.
Only a few hundred miles away in Detroit, Texana Hollis, age 101, was evicted from her home this week. In Hollis’ case, she actually owned her home and had managed to make all of her payments after spending nearly 60 years in the house. In 2003, however, her son asked her to sign it over to a reverse-mortgage company for $32,000 to help with home repairs, but now that the centenarian is unable to make ends meet, the bank has kicked her to the curb. On Monday night, Hollis found herself homeless and in need of help, only to be admitted into an emergency room for severe anxiety and disorientation.
Are investments as safe as Americans think they are? For Hatchel, a one-dollar purchase is leaving her pawning off her possessions decades later and Hollis now finds herself homeless at age 101. Just as Americans aren’t able to make ends meets during dire times, the banks are begging as well and it looks like they are ready to step up and kick a few to the curb if it means more money for them in the long run.
America’s infrastructure is evaporating
America is literally falling apart. From natural disasters, to massive power blackouts, to bridge collapses, US infrastructure has shown that it is not up to standards.
American investment in infrastructure is not keeping up with the rest of the world and could prove to be an economy killer.
A massive power outage that affected millions of people in America’s southwest highlighted vulnerabilities in the nation’s power infrastructure. The outage caused reactors to shut down at the San Onofre nuclear power plant and cut power to wastewater pumps, sending tons of sewage into the Pacific Ocean. These are just the latest examples of a crumbling system.
“We haven’t had the kind of investment or the resources to put the investment into it to keep our infrastructure strong and safe,” said Newark, New Jersey Mayor Corey Booker, during an interview on NBC’s Meet the Press.
In the past years Americans have seen their levees fail leading to massive flooding and cracked bridges buckling, not to mention constant water main breaks and costly traffic congestion. In its report card of America’s infrastructure, The American Society of Civil Engineers gave the nation’s infrastructure a D grade and estimated $2.2 trillion over five years was needed to bring that up to a B.
“This has got to stop. Our bridges can’t fall down. We can’t have collapsing infrastructure that kills people, that hurts people, leaves us unsafe. That’s just not the country we promised to be,” said Richard Eskow, senior fellow with the Campaign for America’s Future.
Besides safety concerns, a crumbling infrastructure threatens to derail hopes of a significant economic recovery in the US, making it difficult to compete with the new powerhouses that see investing in infrastructure as a national priority and driving force of sustainable growth.
“Building a world class transportation system is part of what made us an economic superpower,” said President Barack Obama during an address to Congress. “And now we’re going to sit back and watch China build better airports and faster railroads, at a time when millions of unemployed construction workers can build them right here in America,” Obama added.
The US only spends 2.4 percent of its Gross Domestic Product (GDP) on infrastructure. Europe spends more than twice that and China outpaces everyone at 9 percent.
“We’re being lapped by the rest of the world,” said Damien Goodmon, a public transportation advocate in Los Angeles. “We’re no longer going to be number one. That’s reality,” Goodmon added.
Actually, the US is already far from the top. The World Economic Forum ranks America’s infrastructure twenty-third in the world. Some blame a growing federal bureaucracy and a web of environmental regulations.
“There is no question it would take years to get over the various hurdles and hop scotches that these mega projects have to go through,” said Stefan Molymeaux, host of Free Domain Radio.
President Obama’s proposal to significantly boost infrastructure spending could help create desperately needed jobs but with a gaping deficit and Washington politics in a gridlock, Americans may see this proposal grind to a screeching halt.
Americans sinking into debt
With Americans losing jobs left and right, more and more people in the US are relying on credit cards to make ends meet. So many, in fact, that Americans are 368 percent more in credit debt right now than they were two years ago at this time.
The Q2 2011 Credit Card Debt Study released by CardHub.com reveals that American consumers managed to rake up $18.4 billion in credit card debt in the second quarter of this year alone, 66 percent more than they went under during the second quarter of 2009.
Analysts predict that if this year’s trend continues, credit card debt in America should accumulate to around $54 billion by the end of 2011. Currently the country’s total is $772 billion in outstanding debt.
Odysseas Papadimitriou, CEO of CardHub.com, says that the statistic is “mind boggling,” especially when compared to numbers from two years earlier.
A new report by Absolute Strategy Research, however, suggests that two-thirds of Americans are less likely to borrow or spend in the wake of the recent financial crisis. As more citizens are forced to become reliant on credit due to a lack of a paycheck, though, they are adding more and more items onto their charge cards.
Papadimitriou is weary of the credit numbers, however, and suggests that “If we end up overleveraging ourselves again, it’s going to be the same thing repeated in a few years,” referring to the credit bubble that burst only years ago.
“There is no doubt in my mind that a lot of consumers are reverting back to pre-recession habits and that this is why we are witnessing such a dramatic increase in credit card debt (net of charge-offs). Anyone whose income was tied to the housing boom — either directly or indirectly — should realize that those years aren’t coming back unless we find ourselves in another bubble,” adds Papadimitriou.
Demographers mulling over the 2010 Census data announced earlier this week that more Americans are living in poverty right now than in the entire 52 years that the US Census Bureau has been tracking the statistic.
Americans are poorer than ever
More Americans were living in poverty last year than in the entire 52 years that the US Census Bureau has been tracking the figure, new reports say.
Demographers raking over the 2010 census info have revealed that 56.2 million people in the US were living below the poverty line last year, which puts the percentage of impoverished Americans at nearly one-in-six, reports The New York Times. While the population of the country continues to grow, the raw number of Americans suffering does as well. Speaking in terms of per capita, the 15.1 percent figure of impoverished in 2010 is the highest sampling since 1993.
Data suggests that an additional 2.6 million people in America dipped below the poverty line last year, which the Office of Management and Budge says is an annual income of around $22,314 for a family of four, or $11,139 for a single individual. For adults aged 25 to 34, 45.3 percent were living below the poverty line as of last year.
The median income for 2010, $47,715, is only within a few dollars of the 1973 statistic, adjusted for inflation, signaling a stagnant level of wage earning over the course of several decades now. CNN reports that while consumer prices have risen by around 150 percent since 1980, people in America bring in an average of only 11 percent more than they did 30 years earlier.
The Associated Press, meanwhile, adds to the report with the shocking statistic that the number of Americans in need of health insurance went up as well — now at nearly 30 million. The AP says that a weak economy in the wake of the recession has caused an alarming amount of Americans to lose benefits from their employers, and as the unemployment rate continues at 9.1 percent for the month of August, nearly 14 million Americans are out of a job entirely.
“The figures we are releasing today are important,” Robert Groves, the director of the Census Bureau, tells The Times. “They tell us how changing economic conditions have impacted Americans and their families.”
The recession didn’t impact all Americans for the worse, however. Households raking in more than $100,000 annually saw a raise in income last year compared to 2009. The bottom 60 percent? They saw their income drop drastically.
Back in 2009, only 14.3 percent of the country was living below poverty. Statistics from the 2010 census suggest that that percentage has now gone up for three years in a row.
US poverty at record high